Dabhol faces fuel crunch

New Delhi, June 25 (UNI) The two billion dollar Dabhol project, which restarted after five years, is today facing severe fuel crunch over the scarcity of naptha that may force the suspension next month of its 740-MW phase-1 of the 2,184 MW project in Ratnagiri district of Maharashtra.

Renamed Ratnagiri Gas and Power Pvt Ltd (RGPPL), the project will have difficulty running beyond July 1 and has expressed its inability to operate beyond this time unless the centre exempts customs duty on the expensive fuel- naphtha.

RGPPL also needs an assurance from the Maharashtra State Electricity Distribution Company (MahaVitaran) to continue the drawal of all power generated from block II (of the Phase-1 740 MW project) after June.

There has been adhoc agreement between RGPPL and MahaVitaran for the drawal of power at Rs 4.25 till June but due to the uncertainity over the availability of naphtha and fuel prices expected to escalate to Rs 7.50 a unit, Mahavitran has said that it will not draw power from RGPPL from July 1 onwards.

The current tarif of Rs 4.25 per unit was due to the 35,000 tonnes of naphtha available with RGPPL at zero value.

Meanwhile, power ministry sources said they have written a letter to Finance Ministry seeking waiver of custom duty on naphtha after the same duty on LNG for Dabhol has been slashed by the government.

The power ministry is of the opinion that export of naphtha is viable as procurement within the country is expensive.

Ratnagiri Gas and Power Pvt Ltd, the NTPC-GAIL joint venture that runs the Dabhol power plant, may have to shut down the project by end of this month due to fuel scarcity.

RGPPL, had restarted generation from the plant on May 1 after a five-year gap. The project has used the naphtha that was in stocks when it closed in June 2001.

The project was revived using naphtha instead of LNG to help power strapped Maharashtra especially in summer months.

Maharshtra had been receiving about 350 MW electricity from RGPPL but with RGPPL trying to purchase new stock of naphtha new rates have to be finalised.

UNI RT PU GC1336