India’s government has confirmed that the increase in the price of coal from Indonesia has hit power producing companies in India.

New regulations recently issued by the Indonesian government prohibit the sale of coal, including sales to affiliated companies, below a benchmark price based on international rates. The regulation requires that all existing contracts are modified from this month to comply.

The Indian Minister of State for Power, K C Venugopal, said: “Some power generation companies in India are facing the problem of an increase in the price of imported coal due to the new Indonesian regulations.”

Tata Power and Reliance Power have written to the Power Ministry, requesting it to mediate with the procurers of electricity from their Mundra (Gujarat) and Krishnapatnam (Andhra Pradesh) projects respectively, for an increase in tariffs, as a result of the increased cost of imported coal from Indonesia.

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