A section of fertilizer companies has objected to a proposal by the fertilizer department for immediate stoppage of gas from KG-D6 to non-urea manufacturing units.
The objection comes after reported move by the Department of Fertilizer Joint Secretary Satish Chandra writing to Ministry of Petroleum & Natural Gas Joint Secretary P. K. Singh to stop supply of 0.5 million metric standard cubic metres per day (mmscmd) gas to phosphatic and potassic (P&K) fertilizer manufacturers and allocate all the sanctioned 31.5 mmscmd gas (for the sector) for manufacture of urea only.
The affected companies include Rashtriya Chemicals & Fertilizer (RCF), Gujarat State Fertilizers & Chemicals (GSFC) and Deepak Fertilizer and Petrochemicals Corporation Ltd. (DFPCL).
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“We are surprised by this decision and want this to be reversed immediately. Stoppage of gas will make our operation unviable and if we pass on the additional burden of imported gas, the farmers cannot afford it,” said a fertilizer company senior official.
“In such a scenario, over four million farmers will have to shift to use of urea, which will further create an imbalance in the soil. For better productivity and production all nutrients are essential and thus P&K plays a very important role,” the official added.
It is feared that the price of P&K fertilizer would double from Rs.17,000 per tonne if the manufacturers import gas at international prices. All three companies manufacture 12 lakh tonnes of P&K fertilizer a year.
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Industry officials said in case these companies stopped their P&K production, it would lead to increased usage of urea and imports of P&K. “We will get vulnerable to the vagaries of the rising international prices. The fertilizer industry is part of the priority sector and needs support to create soil balance,” another official said.
The official said that the proposal to stop gas was outside the EGoM’s (empowered group of ministers) mandate, and even the Supreme Court had restrained any order to be passed contrary to the EGoM’s decision.
Earlier, several union ministers, including Sharad Pawar,Jena had strongly advocated for the supply of gas to P&K fertilizer units and even the fertilizer department has supported this view.
The EGoM had also recommended that instead of cutting the supply of gas to P&K units, mop-up of undue gains should be considered and had asked the Department of Fertilizer to prepare a framework for the same. The non-urea fertilizer companies are willing for the same rather than getting any supply at all.