NTPC to cut power tariff by around 50 paise per unit

National Thermal Power Corporation Ltd (NTPC) has offered to reduce  power tariff by around 50 paise for all its naphtha-based power projects, reports quoting officials of the central power utility said.

The move follows the abolition of the 10 per cent import duty on naphtha under the government's stimulus package, which has come as a big relief to power projects running on dual-fuel.

NTPC, which has an installed capacity of around 25,000 MW of power expects the cut in naphtha import duty to bring down per unit tariff by 50 to 55 paise for naphtha-based power projects while GMR, which runs the 220-MW Mangalore power project, hopes power tariff to fall by at least 75 paise.

The unit cost of power from naphtha-based power plants is currently at the level of Rs7.

NTPC currently buys naphtha at around $9 per million British thermal unit (mmbtu) and this will come down by $7.5 with the elimination of import duty.

NTPC's naphtha-based generation of around 780 MW is also expected to get a boost with the import duty reduction. Much of the current capacity is also idling because of the high cost of fuel. 

Power producers expect a reduction in gas prices as well with market forces bringing pressure on spot regasified liquefied natural gas (RLNG), which already sells 25 per cent below naphtha prices.