The Fertiliser Ministry has issued an order restricting companies to transport soil nutrients beyond 1,400 km from ports/plants, a move aimed at decongesting railway traffic and reducing freight subsidy.
The ministry extended freight subsidy worth Rs 4,500 crore in the last fiscal.
“We have decided to keep the distance for movement of fertilisers from ports and plants to a minimum up to 1,400 km in order to avoid criss-cross movement,” a senior Fertiliser Ministry official told PTI.
The official explained that manufacturers and importers can easily supply fertilisers to consuming states within this distance limit.
The limit on distance will avoid decongestion in railway route and will lead to an optimum utilisation of freight subsidy, the official said, adding that the order would apply to both fertiliser manufacturers and importers.
This means, the government will reimburse freight cost on the basis of railway receipts only up to 1,400 kilometres.
This will also help to bring down the total freight subsidy.
Earlier, the companies were free to transport fertiliser from ports and their plants to anywhere in the country without any limitation on distance.
The ministry has identified 14 ports from where fertilisers can be taken through railways to nearby states.
For instance, the companies are allowed to transport fertilisers from ports of Kandla, Mundra, Pipavav and Rozy in western coast to only three states Maharashtra, Madhya Pradesh and Uttar Pradesh.
India imports about six million tonnes each of potash and urea and seven million tonnes of Di-ammonium Phosphate (DAP) every year.