The Coal Churn

The prices of coal and crude oil, the backbone of India’s energy sector, have risen sharply in the recent past on the back of rising global energy prices. Brent crude is hovering around $80 per barrel, up by almost 10 per cent in a month, while coal prices have increased by around 15 per cent since August, according to a BofAML (Bank of America-Merrill Lynch) research report, dated September 29, 2021. Coal and crude constitute the bulk of India’s raw material for transportation and power inputs. The Effect Of Rising Prices Rising oil prices represent an inflationary risk for India, and they put pressure on trade deficit as the country is a big importer of the commodity. This comes at the wrong time. On the one hand, the dollar is appreciating against the Indian rupee and on the other, India is running low on coal reserves which may force the country to increase the...