Brace for higher bills: Centre allows power firms to pass on coal costs

The move comes as the coalition government is trying to tackle a raft of economic reforms, some of them leading to unpopular price rises.

hidden June 21, 2013 13:05:50 IST
Brace for higher bills: Centre allows power firms to pass on coal costs

New Delhi: Consumers will soon have to bear with higher electricity bills as the Centre has decided to allow power companies to pass on the costs of foreign coal to customers, Information and Broadcasting Minister Manish Tiwari said, a move that is likely to boost imports and investment in power generation.

A proposal to raise gas prices has been deferred, Tiwari told reporters after a cabinet meeting.

Brace for higher bills Centre allows power firms to pass on coal costs

Get ready to pay more for power. Reuters

India is the world's third-largest producer of coal and more than half the country's power comes from burning the fuel, but domestic output falls short of demand.

It also means power producers have to turn to expensive coal imports and until now, they have not been able to pass these costs fully on to customers.

The move comes as the coalition government is trying to tackle a raft of economic reforms, some of them leading to unpopular price rises and some giving benefits to powerful vote banks ahead of state elections this year and national elections in 2014.

PTI

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