The government will increase fixed cost payments to 30 gas-based urea manufacturing units by the end of this year, Rajat Kumar Mishra, secretary, ministry of fertiliser said on Wednesday
“The fixed costs, which cover working capital requirements including salaries and plant maintenance, have remained unchanged since 2000 despite sharp rise in inflation”, Mishra said at the sideline of a Fertiliser Association of India (FAI) event.
Urgent Need to Sustain Urea Manufacturing Operations
Urea manufacturers currently receive Rs 2,800-3,000/tonne in reimbursements and an additional Rs 350/tonne hike was added in March 2020.
Subsidy Structure and Future of Soil Nutrients
Farmers get urea at a highly subsidised maximum retail price of Rs 242 for a 45kg bag, which is significantly lower than cost of production of over Rs 2600 a bag.
“We are going to decide very soon… let’s hope that before the end of the year, we will be able to do it,” Mishra said. He said the decision to increase fixed cost payment to fertilizers units would be taken at the ministry level.
Earlier in the FAI event, Mishra said that ensuring a fair and timely revision of fixed costs is essential for sustaining operations and encouraging future investments. This reform has been pending for a long time and your immediate support can provide much-needed relief.
He said that fertiliser availability remains strong through domestic production and imports from Saudi Arabia, Morocco, and Russia helping boost inventory.
Mishra stressed that nano-urea as a cost-effective alternative to conventional soil nutrients which are easier to transport and applied directly to leaves.