With no Greenfield or Brownfield investment happening on the fertiliser production segment since 1999, the central government is considering framing a new urea policy, a union minister told the Lok Sabha on Tuesday.
According to Minister of State for Chemicals and Fertilizers H.G. Ahir, the availability of gas has been one of the major limiting factors to the growth of urea industry in the country. The domestic availability of natural gas is insufficient to meet the demand of existing gas-based urea units in the country.
"Due to shortage of domestic gas, many urea plants which have converted to gas recently are meeting their requirement of gas by using Regasified Liquefied Natural Gas (RLNG)," a statement from the ministry said.
According to the statement, there is also no proposal to increase the retail price of urea, which has been fixed by the Centre at the present level of Rs.5,360 per tonne.
The dry-land farmers will not be receiving free supply of fertilizers as per government policy.
The minister added that although there was no additional "requirement of fund" for phosphatic and potassic fertilizers during 2014-15, the carried-over liability of Rs.17,628 crore on urea subsidy and a subsequent increase in financial assistance on indigenous urea resulted in an estimated shortage of funds for payment of subsidy on indigenous urea to the tune of Rs.27,477 crore.
In order to meet the outstanding urea subsidy claims, a request was also made for allowing the department to avail loans of up to Rs.27,477 crore from nationalised banks under a Special Banking Arrangement. However, the request was not considered.