Coal price pooling issue to go to Cabinet

Tags: News
With impasse over pooling price of coal through blending domestic fossil fuel with imported coal costs remaining unresolved, the matter will now be taken up at the Cabinet level.

"Price pooling will go to the Cabinet as some state governments have shown their strong opposition to the proposal," a source close to the development told PTI.

When asked as to when will it be come to the Cabinet, he said: "Whenever the (Cabinet) note is prepared".

The Planning Commission had earlier said that to offset the impact of high import costs, 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.

This particular proposition of blending price of the imported coal with that of domestic coal possibly does not make any sense to those generating companies located very close to the coal mines, state Energy Secretary PK Jena said in a letter to CEA Chairman.

Likewise, 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 in October asked both Coal India and CEA to work on price-pooling.

Last month, the government had said that CIL and CEA are reworking the coal price pooling mechanism and will submit the revised scheme to the Power Ministry for consideration.

CIL had earlier said that price pooling was a mechanism to implement fuel supply agreement (FSA). If price pooling was approved then 15 per cent 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 per cent domestic coal and 15 per cent imported coal at cost plus basis.

A total of 33 power units, including Rosa and Mundra Adani, having a capacity of 9,671 MW have entered into modified FSA with CIL, according to an official statement.

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