Cabinet to take up urea policy to revive private investment
A key change in the new policy is that it would make it viable for private companies to import costlier imported liquefied natural gas (LNG) to run fertiliser plants. Imported LNG is nearly three times costlier than the scarce domestic gas. Under the proposed policy, the government would provide subsidy to meet the extra fuel cost on imported LNG or coal gas. This would make fertiliser units profitable, as companies would be insulated from any abrupt variation in the fuel prices, the sources said.
The new regime will apply to both greenfield and brownfield projects in the sector. The policy has been finalised based on inputs of a committee of secretaries led by Planning Commission member Saumitra Chaudhuri. While the urea price to the farmer will be fixed by the government uniformly for all producers irrespective of their cost of feedstock, the subsidy outgo to individual companies will vary depending on whether they are using naphtha, furnace oil, domestic natural gas or imported LNG. The subsidy entitlement, therefore, will
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