It is imperative that the Department of Fertilizers grants adequate time to naphtha-based fertilizer companies to switch over to gas-based production, Tamil Nadu Chief Minister Jayalalithaa has urged Prime Minister Narendra Modi.
The major naphtha-based urea fertilizer producing units in the State are SPIC in Tuticorin and the Central public sector undertaking Madras Fertilizers Limited at Manali near Chennai. Together they produce about 10 lakh tonnes per year forming the bulk of naphtha-based urea produced in the country.
Ms. Jayalalithaa, in a letter to Mr. Modi, pointed out that under the New Pricing Scheme III, the Department of Fertilizers, under the Ministry of Chemicals and Fertilizers, had on April 2 last issued a directive mandating all the naphtha-based urea producing fertilizer plants to switch over to gas and that they would not be eligible for subsidy after June 30.
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Pointing out that both the units in Tamil Nadu have invested heavily for the conversion from naphtha as feedstock to gas but they were yet to be given confirmed gas allocation by the Centre, Ms. Jayalalithaa observed in the letter that till such time they were provided gas on an assured basis they could not switch over as imported gas was almost as costly as naphtha.
Ms. Jayalalithaa alleged that despite knowing those facts and when the Lok Sabha election model code of conduct was in place, the previous UPA regime had taken the decision at the “fag-end of its tenure” unmindful of the fact that farmers and hundreds of workers in those two factories would be affected if the plants were to be shut down in the absence of subsidy.
The Chief Minister questioned the rationale of the UPA government’s decision stating that it was the Centre which had to provide gas connectivity and the plants were suffering for no fault of theirs, especially so when one of them was a Central PSU.
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It was imperative that the Department of Fertilizers allowed adequate time for the two companies to switch over to gas and that the Central agencies concerned must provide gas connectivity to them, she has stressed.
Ms. Jayalalithaa urged the Prime Minister to instruct the Department of Fertilizers to take a relook at the whole issue and arrive at a solution keeping in mind the interests of lakhs of farmers and hundreds of workers in those plants by permitting them to receive the subsidy continuously from the Centre till such time gas connectivity was provided to them.