Expressing concern over the closure of two naptha-based fertiliser plants in the State, Chief Minister O. Panneerselvam on Saturday urged Prime Minister Narendra Modi to direct the Union Ministry of Chemicals and Fertilizers for allowing the functioning of the plants with subsidies provisionally.
In a letter to Mr. Modi, the Chief Minister explained that the SPIC, Tuticorin, and the Madras Fertilizers Limited, Manali, stopped their operations from October 1 following the expiry of the extension period of the subsidy on September 30. In this context, Mr. Panneerselvam recalled his predecessor Jayalalithaa’s letter to Mr. Modi in June regarding the continuance of the subsidy until gas connectivity was provided to the plants. Subsequently, the Union Cabinet Committee on Economic Affairs had approved the extension for three months, for which Mr. Pannerselvam thanked the Prime Minister.
Pointing out that the closure had adversely affected the livelihood of hundreds of workers, the Chief Minister said while the two plants had made necessary investments for gas conversion, it was impossible for them to change over to gas as feedstock, in the absence of availability of gas and the infrastructure for delivering gas to the two plants. “Unfortunately, the connectivity is yet to materialise,” he said.
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Referring to the move of the Department of Fertilisers to allot mostly imported urea to Tamil Nadu for the current irrigation season, the Chief Minister said the measure to import one million tonnes of urea additionally this year would not achieve the objective of reducing subsidies by closure of the naphtha-based plants. “Further, the State will also face a loss of revenue by way of VAT paid by the SPIC and the MFL to the extent of about Rs. 220 crore per year,” he said, indicating that the closure would also have effect on the state’s economy.
He added that the cost difference between gas and naptha would be practically nil, if the oil marketing companies could supply naptha at export parity prices instead of charging the import parity prices along with their margin.