Nod to addl fixed cost of Rs350/tonne to 30 urea units

Tribune News Service

New Delhi, March 13

The government today decided to provide an additional fixed cost of Rs 350 per tonne to 30 urea manufacturing units to boost domestic production and reduce imports and facilitate continued operations of urea units resulting in sustained and regular supply of urea to the farmers.

The decision to increase the fixed cost was taken in April 2014 but was not implemented. The fertiliser industry has been urging the government to provide this additional fixed cost to urea plants. The implementation of the Modified NPS-III will result in gains to existing urea units to the extent of their actual increase in fixed cost with ceilings as mentioned in the proposal which will ensure that no unit is benefitted unduly, a statement said.

The Centre fixes the maximum retail price (MRP) of urea. The difference between the cost of production and selling price is reimbursed to manufacturers. India’s domestic production of urea is around 25 million tonnes, while demand is over 30 million tonnes.

“The approval will also grant the special compensation of Rs 150 per tonne to urea units which are more than 30-year old and converted to gas which will incentivise these units to remain viable for sustained production,” it added.

Meanwhile, the government is reviving five closed fertiliser plants of Fertiliser Corporation of India Limited (FCIL) and Hindustan Fertiliser Corporation Limited (HFCL).