PTI reported that the government may ask Coal India Limited to import the dry fuel to meet the growing domestic demand and adopt price pooling of international and indigenous coal for supplying to power companies.

In a letter to CIL, the Coal Ministry has said that "In the interest of growth of the economy and to increase power generation, efforts are needed to make adequate coal available."

The Power Ministry has also suggested to the Coal Ministry that there is necessity of coal imports and pooling of the price of imported and domestic coal.

The Power Ministry said that "In this regard, Central Electricity Authority needs to prepare a detailed operational plan in consultation with Coal India, Railways and Port Authorities."

The pool pricing mechanism of coal may be decided by Coal India Limited. Power generation companies are battling with fuel shortage due to less and erratic supply from the country's largest coal producer CIL.

Earlier, the Prime Minister Office had directed CIL to enter into fuel supply agreements with power producers for committed supply of the dry fuel. The PMO is believed to have asked CIL to assure power firms of providing 65% of the total coal contracted.

The Power Ministry has also suggested that "considering the constraints in ramping up production and arranging import in the first two years of the 12th plan, the penalties for supplies between 65% and 80% for 2012-13 and 75% to 80% for 2013-14 may be suitably relaxed.

The Coal Ministry has asked CIL to consider these suggestions and take appropriate decisions for revision of clauses of the Fuel Supply Agreements to be signed with power producers.

The board of CIL is likely to meet on July 31st 2012 to discuss the matter. The company has set a production target of 464 million tonnes for 2012-13. Coal's demand supply gap likely to reach 185 million tonnes by 2017 against 137 million tonnes at present.

Source - PTI

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