Published on April 14, 2014

The government has revised its subsidy allocation to various categories of fertilizer. The department of fertilizer has firmed up to disposed off the benefit gained by fertilizer industries through access to cheaper natural gas as first priority than to fertilizer subsidy. According to sources the fertilizer industries are getting the benefit of cheaper gas in compare to other chemical industry and further getting the government subsidy in making prices affordable to the farmers, thus alluring the benefit twice in a year. In case of non-urea fertilizer, phosphates and potash are not completely disclosing the benefit accrues. In order to avoid the duplication of subsidy to a single sector, government is looking to net off the usage of cheaper natural gas. According to officials the non urea plants are further getting administrative benefits as well and these benefits need to be further passed on to the consumer in the final MRP. Now government will be slashing the additional benefit calculated from the MRP charged by the companies. The government will finalize the decision and will implement it as policy after the election are over.

Companies dealing in non urea products have got an additional benefit of fixed subsidy rather depending on international prices. On other side Urea subsidy depends on international prices thus remaining floating.

In a recent report published import of urea has plummeted by 12% in 2013-14. The reason behind this decline is the carry forward of stocks from last year. According to ministry the import was anticipated to increase this year owing increase in the sowing area but availability of enough stocks has diminished the need of imports.