At a high-powered meeting of a committee of secretaries, it was decided to allocate furnace oil for a total power-generating capacity of 3000 mw, in addition to the liquid-fuel allotments announced already for 12,000 mw of power-generating capacity. Furnace oil will not be counted in the total allocations of liquid fuels granted already, making room for fresh linkages for other refinery-based fuels like naphtha.

Liquid fuel-based power plants have been allowed to achieve financial closure by October 31 this year. Meanwhile, state governments have the liberty to allocate fresh fuel quotas in lieu of cancelled linkages.

Power plants will be allowed to set up capacity based on liquid fuels, in addition to the linkages guaranteed by the union ministry of petroleum, as long as they take the responsibility of procuring the petroleum products through their ownresources, like imports, for instance. Liquid fuels are expected to be in short supply soon.

The Centre has still decided to encourage the setting up of power plants based on low sulphur heavy stock, furnace oil or naphtha, to be able to meet the demand for energy through short-gestation projects.