Over 100 rice mills move Bengal power ombudsman on tariff ‘disparity’ issue
CALL.
Over 100 rice mills owners in West Bengal have individually approached the State electricity ombudsman to address the problem of “disparities” in power tariffs for the mills across the State after appeals to the West Bengal Electricity Regulatory Commission have so far yielded no results.
According to the Bengal Rice Mills Association, the prevailing “differential treatment” in respect of the power tariffs applicable to the mills is creating economic differentiation on the basis of location, though market and other operational factors remain the same. Electricity cost is the main constituent of the total cost for a rice mill.
The association said the disparity has developed due to the West Bengal State Electricity Distribution Company’s decision to provide power at “deeply discounted rates” to the industrial consumers of the DVC command areas of Pashchim Bardhaman (West Bardwan), parts of Purba Bardhaman (East Bardwan), Bankura, Purulia and Hoogly.
DEEP DISCOUNTS
As a result, the difference between power tariffs applicable to the mills situated in the rest of Bengal and the mills situated in the DVC command area is to the tune of ₹2.50 per unit.
“At present there are around 1,400 rice mills across the State. And out of that nearly 100 mills are availing the reduced tariff by virtue of their location in DVC command area. This is creating a sense of discrimination among rice mills across the
State,” Bengal Rice Mills Association president Sushil Kumar Choudhury told businessline. “The operating market area for rice mills across the state is common. Hence a substantial difference in the power cost has led to serious consequences for the mills which are operating at a higher cost leading to uneven competition in the market,” Choudhury pointed out.
Raising its concerns, the association approached the West Bengal State Electricity Distribution Company (WBSEDCL), Power Department of the West Bengal Government and West Bengal Electricity Regulatory Commission ( WBERC).
The association has also written a letter to West Bengal Chief Minister Mamata Banerjee, requesting intervention to secure “parity” in power tariffs in rice mills across the State.
From the current level, the nearest resistance is at ₹205, where the 50DMA coincides. Nevertheless, we expect aluminium futures to get past this level and touch ₹210 in the nearterm.
Notably, since June last year, the continuous futures of aluminium has been trading within the ₹192210 price band. So, after rallying to ₹210, the contract could see a drop in price.
On the other hand, if aluminium futures decline from the current level itself, it can find support at ₹198 and ₹192. The next major swing in price depends on the direction of the break of the ₹192210 range.
TRADE STRATEGY
Last week, we suggested going long on aluminium March futures at ₹198. Stoploss was suggested at ₹190.
Retain this trade but raise the stoploss from ₹190 to ₹198. Thereafter, when the contract rallies past ₹205, tighten the stoploss to ₹200. Liquidate the longs at ₹210.