Coal India has informed the government that it would be able to assure a minimum supply of only 66% of the total fuel contracted to power plants, a move that would add to the woes of the sector this fiscal.
The proposed minimum fuel supply level of 66% is much lower than the 80% that has been stated in the Presidential directive to CIL in April.
"As per the production plans of Coal India Ltd for this year, the PSU has said that it can make available only 66% of the committed quantity to the power producers for plants commissioned from April 1, 2009," a source in the Coal Ministry told PTI.
This issue is also expected to be taken up at the meeting scheduled for tomorrow at the Prime Minister's Office (PMO) to discuss various factors related to coal sector, amid acute fuel shortages hurting power generation.
The meeting, to be chaired by Prime Minister's Principal Secretary Pulok Chatterji, is also likely to be attended by officials from Coal and Power Ministries, besides CIL Chairman and Managing Director S Narsing Rao.
CIL's proposal to make a minimum fuel supply of 66% is only for the current fiscal (2012-13). In the next fiscal, the same might come down to 55%, the source said.
However, based on future production estimates, Coal India might increase the minimum fuel supply level to 67-68% in 2014-15, and further to 73% in 2015-16.
According to the source, the supply level could be raised to as much as 88% in 2016-17, provided Coal India manages to ramp up production.
Following the PMO intervention, a Presidential directive was issued in April, asking CIL to commit a minimum of 80% of fuel supply to power projects.
CIL, which produces 436 million tonne (MT), plans to enhance the capacity to 464 MT by the end of 2012-13 fiscal.