Coal price pooling likely only for power plants after March 2009
Under the proposed price pooling mechanism, CIL aims to recover the additional cost of imported coal by raising domestic coal prices and supplying full quantity of coal at uniform price to consumers.
The pooling mechanism has already been opposed by a majority of state distribution utilities as they fear that it would result in a sharp escalation in a project’s variable cost and, thereby, result in higher power tariffs.
The government has mooted the idea of price pooling for coal given the widening gap between domestic demand and supply of coal, which has given rise to the possibility of default by several power projects on their electricity supply contracts. It is meant to help CIL comply with its commitment to meet at least 80% of power companies’ coal requirement.
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