Coal India Ltd (CIL) has extended the facility of Usance Letter of Credit (LC) to all coal consumers which will enable power producers and other coal consumers to avail of credit in the purchase of coal.
After a meeting with the Power Minister of State (IC) R K Singh, Union Coal Minister Pralhad Joshi announced a slew of measures on providing relief to the power producers in the wake of the situation that arose from COVID-19.
The ministry approved relaxation in the quantity of coal for linkage consumers. Now, they can lift quantities even beyond their contracted quantity, if coal is available at the mines.
Further, it was announced that no performance incentive shall be levied on the power consumers if CIL supplies more than the upper limit of Fuel Supply Agreement (FSA).
The mark-up over the notified price for the purpose of base price in auctions to Non-Regulated Sector (NRS) has also been reduced. Now, the auctions will be held at the notified price.
“These measures are expected to give a boost to coal demand in the present situation. We will review the situation in September 2020 for further continuance.” Union Coal Minister Joshi said.
