Price fluctuations in natural gas not to affect urea prices
The Dollar Business Bureau Fluctuations in the price of natural gas might affect urea production subsidy provided by the government, but it will not have any bearing on the price of urea. However, the rise in price of natural gas will increase the subsidy burden on the exchequer as there is a direct impact of rise in gas price on the prices of fertilizers since increase in the price of gas by Rs.1.00 per MMBTU results in the increase of the cost of production of urea by Rs. 25.99 (6.499x4= 25.99) (The weighted average energy norm for all 27 gas based urea units in the country is 6.499 Gcal/MT and 1 Gcal = 3.96 MMBTU~ 4MMBTU). Therefore, the ...
Falling gas prices to offset urea imports, subsidy burden
The Dollar Business Bureau The decreasing price of natural gas has created an opportunity for India to enhance its urea production capacity through gas-based plants and offset its subsidy burden. Out of the total consumption of 30 million tonnes per annum (MMTPA), 23 MMTPA is produced in India and 2 MMTPA is imported from Oman under the Urea Off-Take Agreement. The balance requirement of up to 5 MMTPA is met through imports. The government had to increase the subsidy allocation for indigenous urea plants to Rs 360 billion in FY15 from Rs 265 billion in FY14 and revise it to Rs 382 billion (bn) for the current financial year. The subsidy burden had increased due to the upward revision ...
New policy to boost domestic Urea production, curb imports
Government of Indias move to supply gas at uniform delivered price to all fertilizer plants, will lead to an additional production of around 37.13 Lakh MT of urea in existing fertilizer units over the next four years, says the Department of Fertilizers. The Dollar Business Bureau The Indian Cabinet Committee of Economic Affairs (CCEA), on Tuesday, approved a policy to stabilise the prices of natural gas and imported Liquefied Natural Gas (LNG) used by the domestic fertilizer plants. Under this policy, the government intends to supply gas at uniform delivered price to the fertilizer plants on the gas grid, for the production of urea under a pooling mechanism. It is expected that the cost of urea production at pooled price would be less than ...
