‘Subsidy for naphtha-based fertiliser units must continue’

Our Bureau Chennai | Updated on June 10, 2014

The Tamil Nadu Government has urged the Centre to continue with subsidy for naphtha-based fertiliser units till they are able to tie up for natural gas for feedstock.

The Chief Minister J Jayalalithaa, in a letter to the Prime Minister Narendra Modi, urged him to intervene with the Department of Fertilisers to ensure continuation of subsidy for naphtha-based urea producers.

New pricing scheme

Under the New Pricing Scheme III, the Department under the Ministry of Chemicals and Fertilisers has issued a directive on April 2, 2014, mandating all the naphtha-based fertiliser plants to switch over to gas and that they would not be eligible for any subsidy after June 30, 2014.

Tamil Nadu has two urea production units, SPIC, Tuticorin, and Madras Fertilizers Ltd, Manali, in Chennai, a Central PSU.

Gas allocation

They produce about 10 lakh tonnes annually and account for the bulk of urea produced using naphtha.

Both have invested to shift to gas-based production but are yet to get gas allocation by the Central Government. They have taken up the issue with GAIL, Indian Oil Corporation Ltd and ONGC for the gas connectivity.

The livelihood of hundreds of workers and farmers dependent on fertiliser from these units are at stake.

Jayalalithaa said, “I, therefore, request you to kindly issue immediate instructions to the Department of Fertilisers to take a relook at the whole issue and arrive at an immediate solution keeping in mind the interest of lakhs of farmers and hundreds of workers by permitting these plants to continue to receive the subsidy from the Government of India till such time when the gas connectivity is given to them.”

Published on June 10, 2014

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