In a significant move to protect India’s power sector from the fallout of the ongoing Middle East war, Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) have decided to absorb rising input costs without passing the burden on to consumers. The government has turned to domestic coal production to offset the severe disruptions in fuel supply caused by the conflict in West Asia.
The US-Iran war has heavily disrupted global oil and LPG supply through the Strait of Hormuz, pushing India to rely more heavily on domestic coal to power its electricity generation. In response, Coal India and SCCL — the two biggest coal producers in India — have agreed to hold their coal prices steady, even as their own operational costs have risen.
This is a strategic government decision. If coal prices had been increased to match rising costs, electricity prices across India would have shot up, hurting households and industries alike. By absorbing the cost, Coal India is effectively subsidising India’s power sector during a global crisis.
- World’s single largest coal producer
- Produces over 80% of India’s total coal needs
- Has 322 mines across India
- Employs millions of workers directly and indirectly
- Maharatna PSU — one of India’s most important companies
Thanks to this decision, electricity bills across India are unlikely to see any dramatic spike in the near term, despite the global energy crisis caused by the Middle East war. This is a direct benefit to every household and business in India.
Coal India has been gradually increasing renewable energy activity alongside coal mining and has plans to launch subsidiaries Bharat Coking Coal (BCCL) and Central Mine Planning and Design Institute (CMPDI) through IPOs in the future.
