The chemicals & fertiliser ministry has sought additional subsidy from the finance ministry to pay arrears related to phospthatic (P) and potassic (K) fertiliser. The ministry has already spent R12,477 crore ? out of the subsidy of R12,576 crore allocated for imprtored P&K in the Union Budget for 2012-13. The fertiliser ministry, however, has enough funds to meet subsidy payment for imported urea.
“Of the urea import allocation of Rs 18,016 crore, R12,188.70 crore has been utilised so far. The balance available is enough to meet current year’s import of urea requirement,” said Srikant Kumar Jena, the minister of state for chemicals & fertilisers, in a written reply to Lok Sabha on Thursday. Jena said the ministry has sought additional funds for P&K fertilisers. “The temporary delay in payment of imported P&K subsidy will be met out of the additional funds received,” he said.
Meanwhile, the government is also working on a policy to make all urea fertiliser firms running on costlier naphtha to switch to cost-effective natural gas. The fertiliser department is considering the policy as gas is much more efficient and cheaper fuel than naphtha, he said.
Fuel accounts for 80% of the total production cost of urea. The cost of urea production of a gas-based plant is only Rs 8,500 per tonne, while naphtha-based units incur up to Rs 28,000 a tonne. Out of the total 28 fertiliser firms in the country, 8 are currently run on naphtha. One-fifth of the country’s total urea output of around 22 million tonne is produced with naphtha.
Further, the minister stated that the government has estimated the value of land and scrap machines of the eight closed units of Fertiliser Corporation of India Ltd (FCIL) and Hindustan Fertiliser Corporation (HFCL) at R5,582.19 crore. The valuation has been done by Project and Development India Ltd, a central public sector enterprise.
As per data, total value of Fertiliser Corporation of India (FCIL) Sindri is estimated at R1,796.09 crore, FCIL Ramagundam (R411.36 crore), FCIL Talcher (R273.73 crore), FCIL Gorakhpur (R1,101.91 crore) and FCIL Korba (R497.37 crore). The three closed units of Hindustan Fertiliser Corporation Ltd (HFCL) at Barauni, Durgapur and Haldia have been valued at R247.39 crore, R706.27 crore and R548.07 crore, respectively.
The government had last year approved revival of eight closed units of FCIL and HFCIL subject to the condition that Board of Industrial and Financial Restructuring proceedings be expedited and changes, if any, be placed before the Empowered Committee of Secretaries for a final decision. The government plans to set up a minimum 1.27 million tonnes per annum urea plant at each of closed units of HFCL and FCIL, he said.
Jena also said the estimated value of Namrup I plat of Brahmaputra Valley Fertiliser Corporation, which is lying closed, is estimated at R20.75 crore. There is a proposal to set up a brown field ammonia urea plant (Namrup IV) in this vacant land, he said.