Efforts on to resolve fuel issues in time-bound manner: PM

Prime Minister Manmohan Singh today said efforts are on to resolve fuel supply issues faced by the power sector in a time-bound manner and hoped to see results in the next three weeks.

The assurance comes amid severe coal and gas shortages faced by the power sector, leading to lower electricity generation in the country.

"The problem of fuel supply - both coal and gas-to power projects has been posing problems. The Ministries are working to reach a resolution of these problems in a time-bound manner. I hope we will see results in the next three weeks," the Prime Minister told a CII event.

Country's leading power producer NTPC had recently raised concerns about poor quality of coal being supplied to power plants.

NTPC had earlier said Coal India, which accounts for 80 per cent of the domestic coal production, should not be given incentives that CIL gets for exceeding the minimum assured quantity in case it supplies inferior quality fuel to power plants.

As per the fuel supply agreement (FSA), if CIL supplies more than the minimum assured quantity of 80 per cent of the total order to its clients, then the company is provided with some incentives.

Now, some power producers want that if the quality of the fuel supplied is not up to the mark then there should not be any incentives for the coal major.

"There are only one or two issues that remain to be sorted out, and one of them is the quality of coal," NTPC Chairman and Managing Director Arup Roy Choudhury had said.

"We cannot sign an FSA without knowing what is the quality of the coal, but if they (Coal India) give low quality coal to us they should not be incentivised, this is one big issue which remains to be sorted out," Choudhury said.

CIL has so far signed fuel supply pacts with 56 power plants.

The deadline set by the Prime Minister's Office for signing of FSAs between CIL and power producers expired in January. Meanwhile, Choudhury had also said the coal mining sector has not kept pace with power generation.

India recorded a peak power deficit -- shortage in electricity supply when the demand is at its highest -- of 7.9 per cent in February, according to the latest data by Central Electricity Authority (CEA).

Out of the country's peak power demand estimated at 1,26,439 MW during February, as much as 1,16,495 MW was met. Demand in January was 1,32,948 MW, of which 1,17,790 MW was met, according to the data.