The Power Ministry is hopeful that coal price pooling mechanism will be finalised by month-end that will help accelerate the process of signing fuel supply pacts between CIL and power project developers, an official
said.
Price pooling mechanism is a method to determine price of coal for electricity producers by averaging the imported and the domestically produced dry fuel.
We have been given five weeks to come out with a formula …so by this month end we should be able to finalise it,” a Power Ministry official told PTI.
The Cabinet Committee on Economic Affairs (CCEA) last month had given “in-principle” approval for averaging of
prices of domestic and imported coal to get a uniform feedstock price.
CCEA had asked coal and power ministries to come up with specifics of the proposal.
We will meet soon finalise it, we have not met after that meeting (CCEA)…we will meet soon,” the official said.
Prime Minister’s Office last year had directed Coal India and Central Electricity Authority to work on price-pooling so as to ensure 80 per cent supplies to power plants.
However, the final decision on the issue was pending for long due to differences between the Coal and Power Ministries on how the impact of higher imported coal prices will be shared between Coal India and power companies.
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 finalising proposal for pooling coal prices.
Coal India board had earlier approved the modified FSA without price-pooling for assured supply of 65 per cent
through domestic sources and 15 per cent from imports at cost plus basis.
Many state governments, however, are opposed to the idea of price pooling as they fear this will lead to increase
in power tariff.
—————–PTI