President directive likely on Coal India Ltd for price pooling
The Union Cabinet is likely to approve the imposition of a ‘presidential directive’ on Coal India Ltd for implementing the price pooling of domestic and imported coal for supplies to the country’s power stations. The pooling of coal, according to internal estimates of the coal ministry, is likely to translate into a cumulative impact of over Rs 4,000 crore on fuel prices for power plants and lead to increase in electricity costs by upwards of 13 paise per unit (kWh).
This will be the second presidential directive to be imposed on CIL by the government after an earlier directive on signing of fuel supply agreements with power firms.
Coming in the wake of direction issued by the Prime Minister’s Office, the coal ministry has sought approval on pooling prices of nearly 20 million tonnes of coal to be imported from abroad with that of domestic fuel this fiscal. The matter is to come up before the Cabinet Committee on Economic Affairs (CCEA) on Tuesday. Imports have been necessitated by the shortage of domestic coal production.
The proposed mechanism would be implemented for 2013-14 and 2014-15 under a ‘special dispensation’, wherein fuel security would be ensured not only for 60,000 MW capacity to be commissioned during the Twelfth Plan period but also for an additional 7,000 MW to be operationalised during the period.
The power ministry had earlier suggested that CIL should import coal to bridge the supply deficit, duly adjusting the gross calorific value of indigenous and imported coal by
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