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Urea pricing scheme needs a review: Govt
New Delhi, Dec 16: Alarmed at the mounting fertiliser subsidy, government today said urea pricing scheme needs a thorough review and asked the industry to enhance efficiency and reduce costs to face international competition.
New Delhi, Dec 16: Alarmed at the mounting fertiliser subsidy, government today said urea pricing scheme
needs a thorough review and asked the industry to enhance
efficiency and reduce costs to face international competition.
"The Retention Pricing Scheme (RPS) for urea has resulted in several aberrations and increasing burden of subsidy necessitating a re-look", Fertilisers Minister S S Dhindsa said inaugurating a seminar organised by the Fertiliser Association of India (FAI). He said the biggest challenge facing the fertiliser industry is to cope with the situation arising outside the protected environment of the RPS, which has been discontinued for all fertilisers except urea.
"The industry will have to improve its bottom line by implementing energy saving and other cost cutting measures, to be able to survive in the ensuing policy regime", he said. Describing international competition as a more immediate challenge, he said "due to inherent inefficiencies and cost disadvantage, non-gas based nitrogenous units, producing over 30 per cent of the domestic output, will find it difficult to compete in the face of cheaper imports".
Phosophatic fertiliser producers would also face similar threats as the cost of raw materials is as high as the cost of imported fertilisers, Dhindsa said. In his address, FAI chairman P S Gahlaut said gas exploration projects should be given the required support to ensure gas availability to users at the earliest, while pricing of gas should be delinked from fuel-oil parity and based on cost of production.
Bureau Report
"The Retention Pricing Scheme (RPS) for urea has resulted in several aberrations and increasing burden of subsidy necessitating a re-look", Fertilisers Minister S S Dhindsa said inaugurating a seminar organised by the Fertiliser Association of India (FAI). He said the biggest challenge facing the fertiliser industry is to cope with the situation arising outside the protected environment of the RPS, which has been discontinued for all fertilisers except urea.
"The industry will have to improve its bottom line by implementing energy saving and other cost cutting measures, to be able to survive in the ensuing policy regime", he said. Describing international competition as a more immediate challenge, he said "due to inherent inefficiencies and cost disadvantage, non-gas based nitrogenous units, producing over 30 per cent of the domestic output, will find it difficult to compete in the face of cheaper imports".
Phosophatic fertiliser producers would also face similar threats as the cost of raw materials is as high as the cost of imported fertilisers, Dhindsa said. In his address, FAI chairman P S Gahlaut said gas exploration projects should be given the required support to ensure gas availability to users at the earliest, while pricing of gas should be delinked from fuel-oil parity and based on cost of production.
Bureau Report