The government note on pooling the price of coal – blending
the cost of domestic fossil fuel with the imported one – may be placed before
the Cabinet Committee on Economic Affairs (CCEA), which is likely to meet this
week a government official said.
Recently the Coal Ministry had circulated a Cabinet note on
price pooling inviting comments from various ministries -Power, Steel, Shipping, Railways and Planning Commission among others. Earlier, the Power
Ministry had suggested to the Coal Ministry that the difference in cost of
imported and domestic coal should be added to the cost of indigenous fuel at
the time of finalizing proposal for pooling coal prices.
Planning Commission earlier said that to offset the impact
of high import costs, Coal India (CIL) should adopt a pooling formula on prices
by combining rates of imported and domestic coal. Several state governments, including West Bengal and Odisha, have opposed to the proposal of Central
Electricity Authority (CEA) regarding pooling of price for both domestic and
imported coal. The Odisha government had opposed it saying it was not relevant
to the power generating companies located very close to coal mines.
Also, the West Bengal government has raised objections to
price-pooling and conveyed to CIL that such a mechanism was not acceptable to
it. The Prime Minister's Office had earlier asked both CIL and CEA to work on
price-pooling. CIL had earlier said that price pooling is a mechanism to
implement fuel supply agreement (FSA). If price pooling is approved, then 15 % supply of imported coal “will be not in the cost plus method, but in
pooling mechanism”.
The CIL board had earlier approved the modified FSA without
price-pooling with 65 % domestic coal and 15 % imported coal at cost plus
basis. Only 48 power producers have inked fuel supply pacts with CIL so far,
even as the second deadline set by the Prime Minister's Office for signing
these agreements ended last month.
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