The lone chemical fertilizer manufacturer in Karnataka, Mangalore Chemicals and Fertilizers (MCF), which was facing the threat of closure by this month-end, may get an extension of six months.
Dakshina Kannada Lok Sabha Member Nalin Kumar Kateel told The Hindu that Union Minister for Chemicals and Fertilizers H.N. Ananth Kumar had forwarded a proposal to the government to extend MCF’s deadline by six months. The Cabinet has to take the final decision, he said.
The erstwhile United Progressive Alliance (UPA) government had directed the factory to replace naphtha with natural gas as the raw material for production of ammonia and then urea.
The direction was issued to reduce the burden of subsidy on the government towards the subsidy amount, as gas was cheaper than naphtha.
The initial deadline of April 31 was extended to September 30.
Even though MCF has geared up to produce urea using natural gas by making considerable investment, natural gas is still not made available owing to the delay in laying the gas pipeline between Kochi and Mangalore by GAIL.
Source of livelihoodSince MCF has been a source of livelihood for thousands, many people’s representatives from coastal Karnataka, including Mr. Kateel and MLC Ivan D’Souza, took up the cause of the factory. They argued that MCF should not be punished for the fault of GAIL.
Sources in the factory said that they have naphtha stock that can last for three to four days. On whether the required quantity of naphtha could be procured in a short notice if the Centre extends the deadline, the sources said that the Indian Oil Corporation would be able to provide it.
While the cost of production of urea is about Rs. 48,000 to Rs. 50,000 a tonne depending upon the international prices of naphtha, the same would be sold at Rs. 5,300 a tonne to farmers.
The Centre directly pays the subsidy to the factory under government retention price mechanism. If the government does not pay the subsidy, MCF can neither produce nor sell urea at market rates, sources said.
