Conceding to Andhra Pradesh's demand, the Centre has decided to stop diversion of natural gas from Krishna-Godavari basin to Maharashtra.
A day after a delegation, led by Andhra Pradesh Chief Minister N Kiran Kumar Reddy, met Prime Minister Manmohan Singh in New Delhi on the issue, the latter directed the Union Petroleum and Natural Gas Ministry to immediately stop diversion of two million metric standard cubic meters per day (MMSCMD) of natural gas to the Ratnagiri power plant in Maharashtra, sources in the Chief Minister's Office (CMO) said.
"The Prime Minister called the Chief Minister over phone and conveyed the decision," a CMO official revealed.
The Centre's decision comes as a relief to the power-starved state, where gas-based power plants were functioning with a plant load factor of less than 30 per cent, resulting into power cuts for several hours every day.
Forced to follow a three-day power holiday every week due to scarcity of electricity, the industries were the worst hit.
The Union Ministry of Petroleum and Natural Gas had issued an order for diversion of two MMSCMD gas to Ratnagiri power plant, cutting into the supplies to Independent Power Producers (IPPs) in AP.
As a result of the gas diversion, the IPPs in Andhra Pradesh would have got only 1.48 MMSCMD of gas, resulting in a drop in power generation by 400 MW.
The Centre's decision created a storm in Andhra Pradesh with opposition parties demanding the resignation of Union Petroleum and Natural Gas Minister S Jaipal Reddy, who hails from the state.
The Prime Minister, however, assured the CM-led delegation that the decision on gas diversion would be reviewed and accordingly he issued a fresh order on Tuesday evening, the CMO official said.