CCEA may take up coal price pooling proposal this week

"The note on pooled prices may be placed before CCEA, (which is) likely this week," a government official said.

New Delhi: The government note on pooling the price of coal - blending the cost of domestic fossil fuel with the imported one - may be placed before the Cabinet Committee on Economic Affairs (CCEA), which is likely to meet this week.

"The note on pooled prices may be placed before CCEA, (which is) likely this week," a government official said.

A couple of days ago the Coal Ministry had circulated a Cabinet note on price pooling inviting comments from various ministries -- Power, Steel, Shipping, Railways and Planning Commission among others.

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.

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

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 earlier asked both CIL and CEA to work on price-pooling.

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

Only 48 power producers have so far inked fuel supply pacts with CIL so far, even as the second deadline set by the Prime Minister's Office for signing these agreements ended last month.