Indian aluminium producers join in a petition against power duty hike in Odisha

Major Indian aluminium producers National Aluminium Company Limited (Nalco), Hindalco, and Vedanta Aluminium have come forward to jointly protest against the massive power duty hike in Odisha, reported global news agencies Platts and Aluminium Insider.  In a petition to the Government of Odisha the companies sought revocation of the hike, which they claim would be detrimental to their aluminium smelting operations in the state as production costs spiral up.

In more than past twelve months, Odisha’s power duty has risen twice, first time by fifty per cent to INR 0.30 per kilo watt, and then in the recent times- by almost double to INR 0.55 per kilo watt. Domestic aluminium producers say this jump in power tariff would translate in an increase in cost of production by US$61.90 per tonne.

Dr. T.K. Chand, Chairman and Managing Director of Nalco and head of the Confederation of Indian Industry, said in a statement released last Thursday, June 22, that the power duty hike was not at all welcome since the entire aluminium industry is struggling under highly volatile price conditions. There are excess supply issues all over, and the domestic producers are facing tough challenges in the face of rising cheap aluminium imports.

He pointed out that such an increase of duty for a critical raw material like power would also make India less attractive to outside investors.

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“All neighboring states with whom the products of the state of Odisha compete in the domestic market are having electricity duty within the range of 0% in Andhra Pradesh and Telangana, to 32% in Chhattisgarh,” Chand made a point.

He reminded the government that both Nalco and CII had not withdrawn the idea of injunctive relief. In fact, the Captive Power Plant Federation had already won partial relief against the state on the same issue.