Indian Railways’ cheap fares make your electricity tariffs high | September 4

? Cool Title, but what’s the news?

Unit cost of electricity goes up by an average 10 paise owing to the high freight rates of Indian Railways, a study has revealed.

? Okay, but what does it mean?

According to a study conducted by Brookings India, IR overprices coal freight by about 31% to offset its “social obligation”. This, in turn, raises the tariffs people have to pay for the power they consume.

? Why should I care?

The math is quite simple. Coal comprises 44% of IR’s freight revenues. With every unit of electricity requiring about 63 grams of coal, the transportation cost of coal ranges from Rs 0.13/unit to Rs 1.85/unit, depending on the distance it is ferried by railway rakes – the average cost at which states buy power from non-renewable sources is Rs 3.53/unit. Source: Financial Express
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Written by

Vedant Kaushik