Cabinet may take up flexible domestic coal use policy tomorrow

The government has allowed swapping of coal mines by users to help reduce coal transportation cost

Union Cabinet is likely to consider tomorrow a proposal to ease norms for utilisation of domestic coal so that cost of power generation can be reduced.

"The Union Cabinet is likely to consider and approve a proposal to provide flexibility in utilisation of domestic coal for reducing the cost of power generation, in its meeting scheduled for tomorrow," a source said.

Earlier, the government has allowed swapping of coal mines by users so that transportation cost of coal can be reduced for generation of power.

According to a senior coal ministry official, government has allowed coal swapping in 19 blocks which actually reduced the cost of power generation as the users were able to source the dry fuel from miner located nearer to them.

The flexibility in utilisation of domestic coal is also required at this point of time as per experts because the international price of coal has been at lower side.

The option of cheaper coal imports and increase in production by Coal India and its arms have led to a situation where stocks of the dry fuel is piling up in the country.

The proposal is also aimed at improving the consumption of domestic coal by industry mainly power sector in the backdrop of cheaper imports and high production of dry fuel in the country.