Financial Daily from THE HINDU group of publications
Thursday, Apr 18, 2002
Financial Daily from THE HINDU group of publications Thursday, Apr 18, 2002 |
|
|
|
|
|
Home Page
-
Fertilisers Government - Policy Agri-Biz & Commodities - Fertilisers GoM for group pricing of urea from July Our Bureau
NEW DELHI, April 17 THE Group of Ministers (GoM) headed by the Deputy Chairman of the Planning Commission, K.C. Pant, set up to formulate a new pricing policy for urea, has recommended the introduction of a Group Concession Scheme (GCS) for indigenous urea plants to replace the existing unit-wise Retention Price-cum-Subsidy (RPS) scheme from July. In its meeting here on Wednesday, the GoM is also understood to have proposed that the normative capacity utilisation for all gas-based urea units be assessed at 95 per cent from April 1, 2002, while the same for naphtha/fuel oil-based plants be fixed at 90 per cent. Currently, urea units are paid on a per tonne basis with reference to a normative `achievable' level of production, which, is reckoned at 90 per cent of their capacities for gas-based plants and 85 per cent for naphtha/fuel oil based plants. Plants that are more than 10 years old are, however, entitled to a vintage allowance, with the normative utilisation being 85 per cent for gas-based units and 80 per cent for naphtha/fuel oil-based units. For capacity utilisation in excess of these normative levels, the units are entitled to extra recovery of capital-related charges. The GoM has called for phasing out the five per cent vintage allowance on a retrospective basis from April 1, 2001. And from April 1, 2002, all gas-based plants (new or old) will be assessed at 95 per cent and all naphtha/fuel oil-based units at 90 per cent. As regards the transition from the existing RPS to GCS from July 2002 - which forms part of the Centre's long-term urea policy - the details would be worked out in the next meeting of GoM, official sources said. Under the GCS, there will be no separate retention price for each plant and instead, all plants within a particular `group' are to be assigned a single retention price for disbursal of subsidy (covering the difference between the retention price and the farm-gate price of urea). Currently, there are 32 operational urea plants, each being assigned a separate retention price. Under the original GCS formula of the Expenditure Reforms Commission (ERC), it was proposed to classify all urea plants into five groups based on the feedstock used - pre-1992 gas-based units, post-1992 gas-based units, naphtha-based, fuel oil-based and mixed feedstock-based. Thus, there would be a single, uniform retention price for all pre-1992 gas-based plants and similarly one each for all naphtha and fuel oil-based units, and so on. It is not clear, though, whether the GoM will adopt the original `five-group' formula of the ERC or opt for a modified version. The Department of Fertilisers has, in fact, suggested a `nine-group' formula, consisting of three gas-based groups (pre-1992 landfall point units, pre-1992 units along HBJ pipeline and post-1992 units), three naphtha-based groups (pre-1992 units with urea capacity below five lakh tonnes, pre-1992 units with capacity exceeding five lakh tonnes and post-1992 units), two fuel-oil groups (plants below five lakh tonne capacity and plants above five lakh tonne capacity) and a mixed feedstock-based group.
Send this article to Friends by E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|