The oil strike may have ended but it could severely hit fertiliser supplies to farmers at the peak of rabi season and endanger food security. The country?s entire domestic urea capacity of 60,000 tonnes per day , is based on liquid fuel such as naphtha and fuel oil. 17 major fertiliser units have been shut since Wednesday and eight more were perilously close to shutting down, by the time the oil PSU workers called off their stir on Friday.
Shutdown of these units has already cost them a net loss of more than Rs 70 crore. In addition to these are the losses due to loss of production on daily basis.
?This is happening at a time when demand is peaking, and it is bound to have a very severe impact on agricultural production in rabi season and will add further to the woes of the farmers??, the director general of Fertilisers Association of India (FAI), Satish Chander told FE.
The problem is expected to get accentuated further and the availability of fertilisers will be affected even more once the oil strike is called off. This is because it is not easy for the companies to get back to peak production. The start up time for resuming production involves a process that can stretch into a few days before the production efficiency gets normal. This will further add to the losses to a sector which is already fighting for survival. The losses between shutdown and restart are estimated at about 50 crore for the industry.
With fertilizer production grinding to a halt, the agriculture sector will be severely affected. The months of January and February are considered to be the peak season for urea sales, which is used for Rabi crops.
?During the shutdown period, the demand-supply will widen impacting the uniform distribution of the nutrients, Chander said adding that even if the country imports the required quantity of about 70 lakh tones of urea during the season it will take at least a month impacting the agriculture production adversely??.
However, Fertiliser secretary Atul Chaturvedi said, ?We have adequate stocks of urea till date, there is no shortage, if the strike continues for more than three days, agricultural production will suffer, though the government will save on subsidy??.
?We have written to the petroleum ministry to resolve that matter at the earliest. The country has a urea capacity of 220 lakh tones against the requirement of 270 lakh tonnes of urea,? Chaturvedi told FE hours before the strike was called off.
As many as 17 units of the major fertiliser companies including Kribhko, Hazira, NFL-Vijaipur, CFCL-Gadepan, IFFCO-Aonla, Iffco-Phulpur, Indo-Gulf-Jagdishpur, KSFL-Shahjahanpur, TCL-Babrala, GSFC-Vadodara, Gujarat, RCF-Thal, closed down production on Wednesday following the strike in ONGC and GAIL impacting urea production capacity of about 43,000 tonne per day.
Eight naphtha and fuel oil based units of National Fertilizers Ltd (NFL), Sri Ram Fertilisers, Gujarat Narmada Fertilisers and Chemiacals (GNFC), Zuari India, Manglore Chemicals and Fertiliser LTD (MCFL) and Madaras Fertilisers Ltd (MFL) were on the verge of closing down with input stocks for just three more days.