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The government is likely to allocate the natural gas snapped from Deepak Fertilisers to state-owned National Fertilizer Ltd's (NFL) Bathinda urea plant in Punjab.
In May, the Petroleum Ministry had stopped supply of 0.75 million standard cubic meters per day of domestic gas to Deepak Fertilisers on grounds that the private firm was using the cheaper fuel to manufacture market price crop nutrients and not subsidised urea.
The Department of Fertilizers (DoF), which had originally sought stoppage of gas to Deepak Fertilisers, then sought this gas to be diverted to NFL, a urea manufacturing PSU.
Subsequently, the Ministry of Petroleum and Natural Gas on June 17 decided to allocate the gas to all the urea units of NLF - Nangal, Panipat, Bathinda and Vijaipur, in proportion of their requirement.
However, DoF wants the gas to go to only NFL's Bathinda unit as 0.75 mmscmd is a small quantity which cannot meet requirement of even one unit, official sources said.
Sources said DoF received a letter from NFL requesting that instead of proportionate allocation of the 0.75 mmscmd of gas to various units of the company, the whole quantity may be allocated to Bathinda unit.
The proportionate allocation will result in allotment of minuscule quantity in each unit, it felt.
Complete allocation of 0.75 mmscmd gas being allocated to NFL, Bathinda unit will replace costlier imported LNG it now uses, they said adding DoF sent a request to the oil ministry for allocating the gas to NFL's Bathinda unit.
Sources said MoPNG is now allocating the gas which was earlier being supplied to Deepak Fertilisers to NFL-Bathinda unit exclusively.
NFL requires at least 2.8 mmscmd of gas for its three units at Nangal, Panipat and Bathinda which have been shifted from using fuel oil to gas. Also, its Vijaipur plant needs 0.4-0.7 mmscmd of gas, which currently is being made up by buying costlier imported LNG.
The DoF had asked to stop domestic gas to Deepak Fertilisers, as it manufactures nitrogen phosphorus and potassium (NPK) fertilisers, which have been decontrolled and falls under Nutrient Based Subsidy (NBS) scheme.
The cheap domestic gas is meant for urea, as its price is fixed, DoF had argued.
