Urea price may be cut by Rs150/bag

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STAFF REPORT LHR: The government has devised a new price formula recommending reduction of Rs 68 per MMTBU in Gas Development Surcharge (GDS), 4.7 per cent reduction in GST and provision of 200 MMCFD uninterrupted gas supply to urea plants, which will reduce the urea price by Rs150 per bag.

“The Ministry of Industries has also recommended to the ECC that the urea availability as per demand can be ensured through combination of provision of gas to the local fertilizer industry and import of 200,000 tons in time for Rabi 2012-13,” the sources disclosed to this scribe.

On October 3 this year, the ECC of the Cabinet had constituted a sub-committee besides allowing import of 200,000 tons fertilizer under SABIC facility.

The sub-committee later recommended urea price reduction. With this subsidy, the current urea prices of Rs1,659 per bag can be brought down to Rs1,500 per bag. It also recommended the best mechanism for provision of subsidy to farmers is to ensure ample availability of urea to counter hoarding and artificial price hike.

According to the sources, urea off-take during Rabi 2010-11 was 3,160,466 tons whereas prices fluctuated between Rs830 to Rs1,155 per bag and urea off-take for Rabi 2011-12 was 2,710,845 tons with price oscillating between Rs1580 to Rs1,795. Urea off take decreased in Rabi 2011-12 by 14.2 per cent which is negatively affecting wheat productivity.


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