The ministry of chemicals and fertilizers has approved the new investment policy for urea and sent it for inter-ministerial consultations. The policy will be ready for Cabinet consideration in the next few weeks, a ministry official said on the condition on anonymity.
Under the proposed policy, imported liquified natural gas(LNG) used for urea production would be given pass through status so that fertilizer producers get enough subsidy to use the expensive fuel and still make a 12% return on investment.
The new urea investment policy also talks about providing incentives on natural gas price to fertilizer companies for reviving, expanding and setting up of new plants to boost domestic production.
?It is good that some positive is happening in the ministry but it is to be seen how the government plans to implement the same. The government is trying to generate enough investments for new plants, but it needs to be seen what is happening to the existing plants,? US Awasthy, managing director of Iffco said.