Power Ministry has 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.
The ministry has conveyed its comments on pooling of coal
prices to the Ministry of Coal, which is preparing a Cabinet note on the
proposal, to be floated at the earliest.
“The ministry has sent its proposal after consultation with
the Central Electricity Authority (CEA),” a Power Ministry official said.
Power Minister Jyotiraditya Scindia had said that a joint policy
by Power and Coal Ministries on pooling of prices would be formulated, both the
ministries said that they would work out on a mechanism for coal prices to
mitigate the impact of costlier imported coal for the generation companies.
According to CEA's recommendations, the difference in price
of the imported and domestic coal would be transferred on to the cost of
domestic coal. Imported coal is approximately priced at Rs 6,000 per ton and
domestic coal at Rs 4,500 per ton.
The approximate difference of Rs 1,500 per ton would be
multiplied by the total quantity of coal to be imported, including the cost of
transportation, and the entire sum would be divided on the basis of quality of
coal to the power stations.
CEA also said that the coastal plants and power plants which
are equidistant from coast and mines should get imported coal.
It has said that the pithead-based stations or stations
which are near the mines will get domestic coal to meet 80 % of the quantity
Coal India is mandated to supply.
It also suggested that the coal earmarked for old power
plants that are coastal would be forwarded to pithead plants.
CEA has also suggested that top quality coal would be
exempted from such an arrangement.
Coal India had earlier said that price pooling was 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.”
Coal India board had earlier approved the modified FSA
without price-pooling with 65 % domestic coal and 15 % imported coal at cost
plus basis.
So far, 48 companies have entered into fuel supply pacts
with Coal India for receiving the fuel.
As per the FSA, Coal India has to provide an assured supply
of minimum 80% of the total quantity failing which it would be penalized.
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