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Allow Naptha-based Plants of SPIC, MFL With Subsidy Till Gas Connectivity Is Given: OPS

Published: 11th October 2014 12:29 PM  |   Last Updated: 11th October 2014 12:36 PM   |  A+A-

CHENNAI: Thanking Prime Minister Narendra Modi for extending the subsidy for naptha-based fertiliser plants SPIC and MFL in Tuticorin and Chennai 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 they are given gas connectivity.

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 closed their operations from October 1, adversely affecting the livelihood of hundreds of workers. 

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 these plants to change over to gas as feedstock. “Unfortunately the connectivity is yet to materialize”, he added.

Panneerselvam further 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. Further, the State will also face a loss of revenue by way of VAT paid by SPIC and MFL to the extent of about Rs.220 crore per year. The stoppage of production of these two plants will also have spillover effect on the State’s economy”, the Chief Minister pointed out.

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 instead of charging the Import Parity Prices along with their margin. Citing these factors, the Chief Minister had requested the Prime Minister to direct the Ministry of Chemicals and Fertilizers to allow the functioning of the naptha-based fertilizer plants with the subsidies continued till such time gas connectivity is provided to these units.



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