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The government today notified the Cabinet decision to allow fertiliser firms to fix the retail price of phosphatic (P) and potassic (K) nutrients such as DAP but asked them to keep the rates at “reasonable level“.
In April, the Cabinet had allowed firms to increase DAP price by up to Rs 600 per tonne over and above the maximum retail price (MRP) of Rs 10,750 a tonnes prevailing then.
“The market price of subsidised P and K fertilisers including DAP will be open and will be fixed by the fertiliser companies at reasonable level,” Fertiliser Ministry said in a notification issued today.
Under the nutrient-based subsidy (NBS) regime introduced from April 1, 2010, the retail prices of 22 varieties of P & K fertilisers have been freed. For the 2011-12 fiscal, government raised NBS of P&K fertiliser to insulate companies from high global prices, but restricted them from hiking the MRP beyond Rs 600 a tonne.
“The restriction was against the objective of the NBS policy. Last week, the Cabinet gave approval to remove the anomaly in the NBS policy to free P&K fertliliser prices completely,” a senior Fertiliser Ministry official said.
The removal of restriction would boost domestic supply of DAP in the ongoing Kharif season as the fertiliser companies are free to pass on high global prices to consumers, he said.
At present, there is short supply of DAP and other P & K fertilisers as the companies have been shy of importing them due high global prices.
While the companies are entitled for import subsidy on the benchmark price of $612 a tonne only, international prices are ruling high.
According to the notification, the fertiliser companies will be required to print MRP on each fertiliser along with applicable nutrient-based subsidy per bag.
Any sale above the printed MRP is punishable under the Essential Commodities Act, it added.
The annual requirement of DAP in India is about 11-12 million tonnes. Over 8 million tonnes is met through imports from Morocco, Jordan, China, the US and the rest is produced indigenously.
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