Diesel hike: Telecom tower companies cost up by Rs 2100cr

The govt's recent fuel reforms push maybe good news for OMC’s. However, it has not gone down well with telecom tower companies. The industry says the decision to charge bulk diesel buyers a market aligned price could push their costs up by Rs 2100cr, reports CNBC-TV18’s Malvika jain.

India Business Hour at 09:00 pm

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The goverment recent fuel reforms push maybe good news for OMC's. However, it has not gone down well with telecom tower companies. The industry says the decision to charge bulk diesel buyers a market aligned price could push their costs up by Rs 2100 crore, reports CNBC-TV18's Malvika jain.

Also read: Rupee falls on sustained oil demand

Telecom tower companies consume approximately 2 billion liters of diesel every year. According to experts, the government has been providing an annual subsidy of approximately Rs 4300 crore to this sector. However, with the recent decision of the cabinet, telecom tower companies who are considered bulk purchasers of diesel will not be provided any subsidy. Also they will now have to pay a market aligned price.

Umang Das, Director General, Tower & Infrastructure Providers Association (TAIPA) says, "Rs. 9.20 overall increase and almost 25 percent hike, this will indirectly impact consumers". While at its end, the government is struggling to contain the ballooning fiscal deficit, telecom tower companies recommend a more wholistic approach.

"I appreciate the government's approach, but it needs to support renewable energy sector" Das says. Infact by taking its proposal of developing renewable energy forward, the industry has submitted a white paper to the Ministry of Power and Ministry of Renewable Energy. "Have recommended Rs 1700 to Rs. 1800 crore support for renewable energy companies", he adds.

It's not a smooth road ahead. For now telecom tower companies have to depend on diesel. That’s until dependable and cost effective renewable energy solutions are found.

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