Power, CoalMins to deliberate on pooling coal prices this week

Coal

The Ministries of Power and Coal will deliberate on the "contentious" issue of pooling prices of coal in this week's Cabinet meet.

"Deliberations on pool pricing...what is feasible and what is not shall be done in the next Cabinet meet," a Power Ministry official.

Last week, the Cabinet Committee on Economic Affairs gave in-principle approval to the averaging of prices of domestic and imported coal to get a uniform price of the commodity but asked coal and power ministries to come back with specifics of the proposal.

Prime Minister's Office had directed Coal India Ltd (CIL) and Central Electricity Authority (CEA) last year 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 a long time due to differences between the Coal and Power Ministries on how the cost of higher imported coal 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 had suggested that price pooling is a mechanism to implement fuel supply agreement (FSA) that it has to sign with power companies.

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 fear that price pooling will lead to increase in electricity tariffs.

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