? 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