CHENNAI: Thanking Prime Minister Narendra Modi for extending the subsidy for naptha-based fertiliser plants of SPIC and MFL in Tuticorin and Manali respectively till September following a request from former Chief Minister J Jayalalithaa recently, Chief Minister O Panneerselvam on Saturday requested the Prime Minister to allow the functioning of these plants with continuance of subsidy till such time as gas connectivity is given to them.
The Chief Minister, in his letter to the Prime Minister, said since the extension of subsidy to SPIC and MFL ended on September 30, both plants had closed their operations from October 1, adversely affecting the livelihood of workers.
Explaining the impact of the closure of these units, which includes revenue loss to the State Exchequer, the Chief Minister said the Department of Fertilizers had allotted mostly imported urea to Tamil Nadu for this season. “The measure to import one million tonnes of urea additionally this year will not achieve the objective of reducing subsidies by closure of naphtha-based plants.” Panneerselvam also pointed out that the State would also face a loss of revenue by way of VAT paid by SPIC and MFL to the extent of about `220 crore per year. The Chief Minister observed that since the cost differential between gas and naphtha would be practically nil, if the oil marketing companies could supply at Export Parity Prices.
Citing these factors, he had requested the Prime Minister to direct the Ministry of Chemicals and Fertilizers to allow the functioning of these naptha-based fertilizer plants with the subsidies continued till such time gas connectivity is provided to these units. The Chief Minister said, though the two plants had made necessary investments for gas conversion, in the absence of availability of gas and the infrastructure for delivering gas to these two plants, it had become impossible for the plants to change over to gas as feedstock. “Unfortunately the connectivity is yet to materialize”, he added.