It cannot be done in this inverted manner for long in India, he said. He drew attention to Pakistan where the power purchase structure is being straightened out and a level playing field is being created between the private power producers and the state units.

Ramakrishna said that this bias in favour of IPPs will put a big strain on SEBs as it will become difficult for them to recoverthe high cost of power. He also called for greater competition to be introduced as that will bring down the cost of power for the buyer. Where ever competition has been brought in, the cost of power has come down by 25 per cent, he said.Larger distribution of risk will be fairer, currently the exchange risk as well as fluctuations in the price of imported inputs is borne by the buyer he said.

Referring to the issue of restructuring transmission, Ramakrishna said that the country has to move towards a national grid where power flows across different states. Dependence on imported fuel can be an expensive affair, to obviate this plants can be put near coal pit-heads but that would require that the issue of transmission is sorted out, he said.

OPEC has drawn out plans to cut production and this agreement is expected to last, if this is so, then the price of oil can go up to $ 14 per barrel, he said. But the primary hurdle is to resolve the disparity between distribution costs and tariff which will have to besorted out, he remarked.