Comments
The proposed policy for allocation of domestically-produced natural gas, which downgrades the position of urea manufacturers in the pecking order, has prompted fertiliser sector players to reiterate their demand of being kept at the top of the list.
The Fertiliser Association of India (FAI) sent letters to the Fertiliser and Agriculture Ministries on Tuesday demanding not only that the fertiliser sector be given top priority ahead of CNG (compressed natural gas) and PNG (piped natural gas) sellers and atomic energy and space research sectors, but also that there should be no differentiation in allocation between urea and NP/NPK fertilisers.
“It has been our consistent stand…application of nitrogen should not only be through urea but also through more balanced fertiliser products like NP/NPK and production of these products is equally important,” the letter stated.
Balanced fertilisation
At a time when ‘balanced fertilisation’ has become a mantra, the industry points out that the proposed re-allocation policy would hurt P&K (phosphatic and potassic) fertiliser manufacturers despite the need for higher quality fertilisers.
The 2013-14 Economic Survey estimated that proportions of nitrogen (N), phosphorus (P) and potassium (K) usage should be 4:2:1, but officials point out that it is as much 38:6:1 and 53:11:1 in Punjab and Haryana, respectively, on account of excessive urea application. Nationally, it is estimated at 8:3:1.
“N beyond 4 is unproductive. Balanced use is not happening. If urea is fourth in the allocation policy now but the small quantity required by the P&K manufacturers, about 2 mmcmd, has been given the last position which means there will be no availability,” said a senior industry official, who warned that fertiliser subsidy would increase with a policy shift and hurt farmers.
Idle assets
The official said the Empowered Group of Ministers (EGoM) in 2013 had decided that 31.5 mmcmd allocated to the fertiliser sector which included both urea and NP/NPK fertilisers. A change in the allocation policy would particularly hurt those P&K fertiliser manufacturers that had units located away from ports.
“These plants cannot rely on imported R-LNG, it’s not viable. Also, ammonia will have to be imported and new transportation infrastructure set up though their existing ammonia and nitric acid production units are running. Such productive assets left idle, is that not anti-Make in India?” he said.
The FAI letter also highlights domestic production over imports in its letter. “Nitrogen is imported through ammonia and finished products like urea and NP/NPK fertilisers. 40 per cent of domestic production of nitrogen in the country is also dependent on imported gas as LNG. Any loss of production of NP/NPK fertilisers due to non-availability of domestic gas will increase import dependence,” it said.
Between last April and this January, India imported 7.3 mt of urea, as per Ministry data, while annual demand is about 30 mt. The Centre raised the price of natural gas from $4.2/mmBtu to $5.6/mmBtu and is up for revision in April.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.