Cabinet approves coal price pooling in-principle
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) Tuesday gave its in-principle' approval for coal pool pricing by which prices of domestic and imported coal are averaged to get a uniform price for the fuel in the country.
"The in-principle decision has been taken. There are some data that have to be put into these principles," said Information and Broadcasting Minister Manish Tewari told media persons after the meeting.
"The structure of the decision has been put in place. And the ministries of coal and power would come back with the specifics. Basic principles and parameters have been identified. The plotting of real numbers has to be done," he said.
The CCEA would again deliberate on the issue, he said.
Without indicating any timeline, Tewari said: "Both the ministries have appreciated the urgencies and they would be coming back as quickly as possible."
A decision on price pooling has pending for long because of differences between the coal and power ministries on how the impact of higher imported coal prices will be shared between state miner Coal India (CIL) and power companies.
The power ministry had opined that the difference in cost of imported and domestic coal should be added to the cost of indigenous fuel at the time of finalising the proposal for pooling coal prices.
The CIL board had earlier approved the modified fuel supply agreement (FSA) with power companies without price-pooling, for assured supply of 65 percent through domestic sources and 15 percent from imports at a cost plus basis.
CIL has said if price pooling is approved, then 15 percent supply of imported coal will be not in the cost plus method, but by the pooling mechanism.
State governments have voiced their reservations about price pooling for reasons of its effect of increasing power costs.