The Union Ministry of Power has sought a subsidy of over Rs 24,300 crore from the government to bail out gas based power plants, which have been suffering due to high cost of gas prices.
As per the proposal moved to the Cabinet Committee on Economic Affairs (CCEA), the Ministry had said the gas based power generating stations, which has capacity to generate 24,000 mw of power, may become economically unviable unless the government announced a bailout package for them. The cost of power generated by gas-based stations has soared in the last few months due to rise in prices of imported fuel, touching Rs 10 per unit from Rs 5 per unit.
Besides burdening consumers, the steep price of power from the gas generators have also made some bulk consumers reluctant to buy electricity from them, a power ministry official told Deccan Herald.
As a relief to both consumers as well as power generating stations, the Ministry now wanted to pass on only Rs 5.50 per unit to the consumers and subsidise the rest by way of direct cash payout, an official said.
The ministry worked out the total subsidy amount to be Rs 24, 337 crore for three years with Rs 2,498 crore for the current fiscal (2013-14), Rs 10,990 crore for 2014-15 and Rs 10,849 crore for 2015-16.
The Ministry also proposed to pool the prices of imported gas with domestic prices from this fiscal to have a uniform tariff rate for all gas-based electricity generation stations.
With supplies from Reliance Industries' eastern offshore KG-D6 fields drying up, power plants presently get just 17.25 million standard cubic metres per day of gas from domestic fields as against an allocation of 71.29 mmscmd.
Despite buying about 3.5 mmscmd of liquefied natural gas (LNG), several plants are stranded for want of fuel. Currently the power generated using domestic gas is costing around Rs 4 to 5 per unit while power generated out of imported fuel costs up to Rs 10 per unit.