To increase urea supply in southern states, the cabinet on Wednesday approved the continuation of production of urea from three units located in Karnataka, Tamil Nadu and Kerala, which use naphtha as feedstock, till gas is made available via pipeline or any other means.
“The Cabinet Committee on Economic Affairs (CCEA) has approved continuation of production of urea from Madras Fertilizers, Manali, Mangalore Chemicals and Fertilizers, Mangalore and Southern Petrochemical Industries Corporation, Tuticorin, using naphtha as feedstock,” fertiliser minister Ananth Kumar said.
While the total annual urea requirement of Karnataka, Tamil Nadu and Kerala is 23 lakh tonne, the annual production from these three units is around 15 lakh tonne. “There are only two urea units at Kakinada in the entire Southern region other than these three units. If these three units would have been closed, then the entire requirement of the southern region would have had to be sourced mainly through imports”, an official statement said.
Continuation of operation of these three units would substantially ease the problems of urea supply in southern states during the ensuing Kharif, the statement said. However, the Tamil Nadu Karnataka and Kerala governments would be required not to charge VAT or entry tax on naptha as decided in the earlier meeting of the CCEA in December 2014, Kumar said.