Providing a major relief to three fertilizer manufacturers in the South, the Cabinet Committee on Economic Affairs, on Wednesday, allowed them to produce urea using naphtha as feedstock, according to a release.
Accordingly, Madras Fertilizers Limited (MFL), Mangalore Chemicals and Fertilizers Ltd (MCFL) and Southern Petrochemical Industries Corporation (SPIC) can produce urea for another three months (July to September), using naphtha.
Recently, the Centre had asked these firms to switchover to natural gas or else subsidy would not be given. It had set June 30 as deadline under the Modified New Pricing Scheme-Ill.
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Under this scheme, the Centre decided to pay special compensation to urea plants having completed 30 years and converted to gas besides phasing out old and inefficient units after adding new capacities. It was also decided to stop paying subsidy after June 30.
According to company officials, these fertilizers companies were unable to convert to gas from naphtha, as there was protest from farmers in laying gas pipeline in Tamil Nadu. Moreover gas was not available.
Collectively, these firms produced so far about 14 lakh tonnes of urea.
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Talking to The Hindu , the officials said, “ We do not get any clue from the Centre about the release of subsidy. We are struggling to operate the units. But now that the Centre has given a temporary relief, we can operate units till September. However, we wish that the subsidy is made available to us till March.”