India has shelved a proposal that would have required power plants to import coal to replenish dwindling stockpiles, Bloomberg News reported on Monday, citing people familiar with the discussions. The government had recently considered asking power plants to blend imported coal with domestic supplies to ease the shortage, but the plan was put on hold after elevated international coal prices and a weaker rupee made overseas shipments more expensive, according to the Bloomberg report carried by The Economic Times and other outlets; Reuters said it could not immediately verify the report.

The pressure is real: coal inventories at Indian power plants have fallen to their lowest level in nearly five years. Data from the Central Electricity Authority put stocks at 20.44 million tonnes on October 18 (yaani about 2.04 crore tonnes), down 2.03 per cent week on week, with 93 power plants operating with critical fuel stocks, up from 87 a week earlier.

Instead of imports, policymakers have asked state-owned Coal India Ltd to raise production and the railways to ensure coal reaches power stations on time, Bloomberg reported. Higher electricity demand amid hotter-than-usual weather linked to El Nino and reduced hydropower generation have increased the burden on coal-fired plants. The government has already ordered more than 100 captive coal-fired power plants to run at full capacity from October 1 through the end of the year to meet expected demand growth.

Sources: Bloomberg News via The Economic Times; Reuters; Central Electricity Authority data reported by Sxcoal.