Power Co's costs likely to be controlled

08-Feb-06

The government is considering a complete waiver of customs duty for fuels - coal, LNG and naphtha. Fuel shortage has already led to idling of nearly 4,000 MW of gas-based power production capacity and another 6,500 MW of gas-based power projects hang in limbo. ONGC's gas production is not likely to increase during the XIth plan. All this points to increased dependence on imports, making the proposed duty cut significant. A waiver of the 5% customs duty is a welcome measure to soften the blow.