Deregulation of Urea Prices Ruled out

Published: 21st March 2015 06:00 AM  |   Last Updated: 21st March 2015 05:02 AM   |  A+A-

NEW DELHI: The Ministry of Chemicals and Fertilisers ruled out the possibility of deregulating urea prices.  It also projected urea demand to increase to 35.30 million tonnes (mt) by 2019-20 from 32.85 mt in 2015-16. For March, it is pegged at 1.02 mt.

“The Department of Fertilisers has no proposal to deregulate urea,” said Hansraj Gangaram Ahir, Minister of State for Chemicals and Fertilisers in a written reply to Rajya Sabha.

Deregulation will lift government ability to control urea prices and will give producers ability to determine prices.

Deregulatio.JPGCurrently, the Maximum Retail Price (MRP) of urea is fixed at `5,360 per tonne. The difference between the cost of production and MRP of urea is provided as subsidy to manufacturers.  In April, 2010, the government had decontrolled Phosphatic & Potassic (P&K) fertilisers and implemented Nutrient Based Subsidy policy. Under NBS, the subsidy on decontrolled P&K fertilisers is determined for each nutrient on per kg basis and fixed by the government annually. Retail price is fixed by producers.

“The gap between demand and indigenous production is fulfilled through import. The cost of imported fertilisers is nearly same as that of domestic production,” he said.  According Ahir, ONGC and Chambal Fertilisers and Chemicals Ltd have proposed to implement a greenfield ammonia/urea fertiliser project on a suitable site near ONGC’s newly found gas fields at Khubal in North Tripura district.  “An MoU was signed between Tripura government, ONGC and CFCL on April 9, 2013,” he said.

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