CHENNAI: Chief Minister J Jayalalithaa has urged Prime Minister Narendra Modi to continue to extend subsidy to two major Naphtha-based fertiliser plants in Tamil Nadu — SPIC (Tuticorin) and Madras Fertilisers Ltd (Manali) in Chennai — until they are given gas connectivity for switching over to gas-based production.
As per the New Pricing Scheme III, introduced by the Department of Fertilisers under the Ministry of Chemicals and Fertilisers on April 2, 2014, it has become mandatory for all the Naphtha-based urea producing fertilizer plants to switch over to gas and the plants would not be eligible for any subsidy after June, 30, 2014.
SPIC and MFL together produce about 10 lakh MT per year forming the bulk of urea produced in the country, Jayalalithaa said in her letter to the Prime Minister on June 9, and added that both had invested considerably for conversion from Naphtha to gas. However, they were yet to get confirmed gas allocation.
Both these plants had taken up the issue with all the organisations concerned viz: GAIL, IOCL., and ONGC for gas connectivity. “But, till such time as they are given gas on an assured basis, they will not be able to switch over to gas-based Urea production as imported gas is almost as costly as Naphtha”, she pointed out.
The then UPA had taken this decision at the fag end of its tenure, unmindful of the interest of the farmers, and the hundreds of workers employed in these plants which have to be shut down in the absence of the subsidy. Jayalalithaa said the very rationale of this decision becomes questionable when the Centre, which had to provide gas connectivity, did not do so for no fault of the companies and when one of these plants belongs to a Central PSU. “It is imperative that the Department of Fertilizers allows adequate time to Naphtha-based fertilizer companies to switch over to gas based production and the concerned Ministries and Organisations of Government of India should provide for the gas connectivity”, she added.
The CM requested Modi to issue immediate instructions to the Department of Fertilizers to take a relook at the issue and arrive at a solution keeping in mind the interest of lakhs of farmers and hundreds of workers by permitting these plants to continue to receive the subsidy.