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Updated: June 28, 2013 23:39 IST

Fertilizer units demand decontrol

Special Correspondent
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The country produces 22 million tonnes of urea, against the requirement of 32 million tonnes.
The country produces 22 million tonnes of urea, against the requirement of 32 million tonnes.

The fertilizer industry, on Friday, sought immediate decontrol of the sector.

The industry said the move by the government to double the natural gas prices would lead to rise in the subsidy bill by Rs.11,000 crore annually if urea prices were also not increased proportionately. IFFCO Managing Director U. S. Awasthi, in a statement, suggested that the government should develop a mechanism to provide subsidy or support to the farmers — may be direct cash transfer of subsidy to farmers. “Since the hike in the gas prices has been given to bring investments to increase natural gas production indigenously, the same philosophy should be applied to the fertilizer industry. The fertilizer sector should be freed from the government control, and be treated as part of market-driven economy,’’ he said.

Criticising the move to hike gas prices, the Fertiliser Association of India (FAI) said if the urea prices were not raised in proportion to the gas price, the extra subsidy burden would be Rs.11,000 crore annually from next year onwards.

The country produces 22 million tonnes of urea, against the requirement of 32 million tonnes. The balance is met through imports.

Meanwhile, hailing the government’s move to hike gas prices, the Confederation of Indian Industry (CII) said the increase in gas prices would not only encourage upstream companies to invest in more challenging frontiers to augment gas production, but also a good amount of this increased price would flow back to the government in terms of royalty and dividend.

The Federation of Indian Chambers of Commerce and Industry (FICCI) said the revision in natural gas price would bring in the much required technology and risk capital from foreign majors to tap the vast unexplored resources in deep and ultra-deep water frontier basins.

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