Coal Minister Sriprakash Jaiswal informed reporters that his ministry submitted a note on the mechanism for coal price pooling to the Cabinet Committee on Economic Affairs (CCEA), which would take a final call in its next meeting.
Under the proposed new pass-through mechanism, entire additional cost of imports would be passed on to the consumers against averaging of prices of imported and domestic coal under the earlier price-pooling mechanism.
Earlier, the CCEA cancelled the proposal of price pooling of coal noting widespread opposition from states.
But now, the power ministry revived the proposal of price pooling in the form of ‘pass-through mechanism’.The proposal of price pooling, essentially a process of averaging of prices of domestic and imported coal to implement a uniform price for power producers, was earlier approved by the Cabinet in February, albeit with a directive that the coal and power ministries come back with details of the process.
But the proposal was opposed by several states, mostly coal-bearing ones, including Orissa and West Bengal saying averaging high prices of imported coal with cheaper notified domestic prices would only benefit the new private sector coal plants at the cost of older state-owned power producers which have coal linkages.
This prompted the coal and the power ministries to rework the proposal with the intervention of the Prime Minister’s Office.