Budget 2013:Duty increase on steam coal may push up electricity tariff

The government on Thursday announced raising basic custom and countervailing duty on steam coal, used in power generation, a step which analysts said will lead to marginal increase in power tariffs.

Finance Minister P Chidambaram in his budget speechannounced a hike in the basic customs duty on steam coal from present nil to two per cent and countervailing duty (CVD) from one per cent to two per cent.

According to analysts the increase in basic custom and countervailing duty may marginally increase the electricityprices.

“With the hike in both duties, the power generating companies will pass on the increase to the consumers and may lead to increase in power tariffs,” an industry analyst on the condition of anonymity said.

The steam coal import target for the current fiscal is 70 million tonnes against 60 million tonnes in the last fiscal. Till now country has imported 50 million tonnes of steam coal

Steam coal also known as thermal coal is mainly used in power generation.


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