CCEA allows 3 naphtha-based urea units to continue production

The Cabinet Committee on Economic Affairs has approved the continuation of production of urea from Madras Fertilizers Limited (MFL), Manali; Manglore Chemicals and Fertilizers Ltd (MCFL), Mangalore; and Southern Petrochemical Industries Corporation (SPIC), Tuticorin after June 2014 by using existing feedstock naphtha for three months beyond June 30, 2014 till September 30, 2014.
 
On February 28, 2014, CCEA, then under UPA regime, had approved the proposal of the Department of Fertilizers regarding modified New Pricing Scheme III (NPS-III) for existing urea units. The modified NFS-Ill was implemented to compensate existing urea units for increase in fixed costs, etc, and thereby facilitate their continuing operations and regular supply of urea to fanners.
 
As per the approved modified NPS-III, the production of high cost naphtha-based urea units - namely SPIC, MFL and MCFL – was supposed to continue under modified NPS-III till the gas availability and connectivity is provided to these units or June 2014 whichever is earlier, beyond which subsidy for naphtha based plants will not be paid. The scheme also made it clear that no new naphtha based plants will be permitted in greenfield investments.
 
With CCEA, chaired by the Prime Minister Narendra Modi, giving extension to these units to continue urea production for the next three months, it will help in meeting the requirement of urea for Indian farmers in the ongoing kharif season. This decision will ensure food security of the country. All stake holders namely farmers, urea manufacturers in the country and the Government will be benefitted by this.