The Hindu Business Line : Dept of Fertilisers keen to revive freight equalisation for gas

New Delhi, Oct. 30 The Department of Fertilisers is keen on reviving the freight equalisation scheme for the supply of gas to the fertiliser industry. This system was done away with fifteen years back, but the Department wants it restored as the fertiliser sector has been given priority in the allocation of natural gas.

“The proposal is still in the early stages of conceptualisation, but the Department is keen that the scheme be revived as the fertiliser sector has been given the top priority for the allocation of natural gas,” an official in the Department of Fertilisers told Business Line.

Under the freight equalisation scheme, incentives are given to industries located far away from the raw material sources.

“The Department fears that since natural gas is being supplied from very few regions, its availability will only benefit companies that are located close to the feedstock and companies located far away might have to pay a higher cost.

Also, as per the analysis done by the Department, we feel that there is a need to set up fertiliser plants in six to eight States, and this scheme is expected to benefit such plants,” the official said.

The Department also feels that it is easier to transport gas and involves lesser expenditure rather than spending on developing fresh infrastructure to store the stocks. “We have worked out the economics and it is far cheaper and lighter for the transport of gas as against building railway infrastructure like parallel lines and warehouses,” he added.

The domestic fertiliser sector has been facing an acute shortage of the availability of gas and the Government has encouraged the conversion of non-gas based fertiliser plants to gas-based ones. Out of the 28 domestic urea plants, 12 use naphtha or furnace oil as the feedstock.

Gas supply

The fertiliser industry is now getting around 29 million standard cubic metres per day (mmscmd) of gas. But recently, the Group of Ministers on Fertilisers has approved the supply of 95 mmscmd during the current five-year plan.

Gas is the preferred feedstock for urea production as it is a more efficient and cleaner source of energy and more cost effective.

More Stories on : Fertilisers | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page