Daily Current Affairs : 8-November-2023
In recent news, the National Coal Index (NCI) witnessed a notable increase of 3.83 points in September. This upturn was primarily attributed to a temporary surge in global coal prices, reflecting a dynamic shift in the coal market.
National Coal Index Overview
Initiation and Purpose
The NCI, introduced on June 4, 2020, by the Ministry of Coal, serves as a crucial price index. It gauges the fluctuations in coal prices in a given month concerning a fixed base year. This index plays a pivotal role in determining Premium (per tonne) or Revenue Share (percentage basis) through a market-based mechanism.
Comprehensive Coverage
The NCI is designed to encapsulate all transactions involving raw coal within the Indian market. This includes both coking and non-coking varieties across various grades, traded in both regulated (power and fertilizer) and non-regulated sectors. Transactions covered range from those at notified prices to coal auctions and imports.
Factors Driving NCI Increase
Upcoming Festive Season and Winter
The recent upward movement in the NCI indicates a surge in demand for coal. This surge is attributed to the imminent festive season and winter in the country. As these seasons approach, the demand for energy is expected to rise. In response, coal producers are likely to capitalize on this trend by enhancing domestic coal production to meet the growing energy needs.
Important Points:
- National Coal Index (NCI) Surge:
- Increase of 3.83 points in September.
- Driven by a temporary rise in global coal prices.
- Introduction to NCI:
- Launched on June 4, 2020, by the Ministry of Coal.
- Serves as a price index reflecting coal price changes in a specific month relative to a fixed base year.
- NCI’s Purpose and Mechanism:
- Determines Premium (per tonne) or Revenue Share (percentage basis).
- Relies on a market-based mechanism.
- Comprehensive Coverage of NCI:
- Encompasses all transactions of raw coal in the Indian market.
- Includes coking and non-coking coal of various grades.
- Covers regulated (power and fertilizer) and non-regulated sectors.
- Encompasses transactions at notified prices, coal auctions, and imports.
- Factors Driving NCI Increase:
- Upward movement indicates rising demand for coal.
- Influenced by the approaching festive season and winter.
- Anticipation of higher energy demands prompts coal producers to scale up domestic production.
Why In News
The National Coal Index increased by 3.83 points in September, driven by a temporary rise in coal prices in global markets, reflecting the dynamic nature of the energy commodity landscape.
MCQs about National Coal Index Surge
-
What primarily contributed to the increase in the National Coal Index (NCI) in September?
A. Decrease in global coal prices
B. Temporary rise in global coal prices
C. Introduction of the NCI in June
D. Fixed base year adjustment
-
When was the National Coal Index (NCI) introduced, and what is its primary function?
A. June 4, 2020; Reflects changes in oil prices
B. January 1, 2021; Determines steel production rates
C. June 4, 2020; Gauges coal price changes in a month relative to a fixed base year
D. December 15, 2019; Monitors natural gas fluctuations
-
What does the National Coal Index (NCI) encompass in its coverage?
A. Only coking coal transactions
B. Raw coal transactions in the global market
C. All transactions of raw coal in the Indian market
D. Transactions exclusively in the non-regulated sectors
-
What does the upward movement of the National Coal Index (NCI) suggest?
A. Decreasing demand for coal
B. No significant impact on the energy sector
C. Anticipation of higher energy demands
D. Global coal production decline
Boost up your confidence by appearing our Weekly Current Affairs Multiple Choice Questions
