The Hindu Business Line : Maharashtra for restarting Dabhol plant with naphtha as feedstock

The Maharashtra Chief Minister, Mr Vilas Rao Deshmukh (left), calling on the Minister for Petroleum and Natural Gas, Mr Murli Deora, at his chamber in the Capital on Wednesday. — Ramesh Sharma

New Delhi , Feb. 8

WITH Maharashtra already paying more than Rs 7 per unit for additional power supply from National Thermal Power Corporation, the State Government is now pressing the Centre to re-start the Dabhol plant with naphtha as feedstock, even if it means that the power would cost substantially higher than Rs 2.80 per unit as envisaged earlier.

Faced with a major power shortage, Maharashtra has proposed operating the 2,184-MW Dabhol power plant, now renamed Ratnagiri Power and Gas Ltd, on naphtha because it has not been able to tie up liquefied natural gas (LNG) supplies for the plant.

The Chief Minister, Mr Vilas Rao Deshmukh, who was here on Wednesday and had a meeting with the Petroleum Minister, Mr Murli Deora, told newspersons that though the deal with NTPC — which will be operating the Ratnagiri plant — was to supply power at Rs 2.80 per unit using gas as fuel, the State was willing to pay a higher price depending on the fuel used.

"We realise it would not be possible to provide power at Rs 2.80 per unit using naphtha, but considering that we pay Rs 7.05 per unit for power supply from NTPC's Kawas power plant, we would be willing to pay more as we cannot keep people in darkness," he said. The Chief Minister also indicated that the Maharashtra State Electricity Board (MSEB) could subsidise Dabhol power.

"It looks like it will have to be run on naphtha. We are 4,500 MW short of power and we have requested that the plant be run on naphtha at least to meet the peak hour demand," Mr Deshmukh said.

Estimates show that MSEB, which is to buy the Dabhol power, will have to bear a loss of about Rs 190 crore, if the plant was to run on naphtha for three months. Mr Deshmukh also said that it looked like the start-up of the plant could be delayed.

On suggestions from the Petroleum Ministry to reduce sales tax on fuels in the State, the Chief Minister stressed the need to evolve a uniform policy regarding taxes on fossil fuels. "A uniform policy like value added tax should be proposed. We will fall in line with the national policy. Otherwise, States would indulge in competitive sales tax structure," he said.

The Petroleum Minister agreed that there was a need to streamline the sales tax system. "This is a very difficult task. I have no immediate solution to offer. Maharashtra gets Rs 5,000 crore through sales tax on petroleum products. Even a one per cent reduction would impact it to the tune of Rs 150 crore," he pointed out.