Business Daily from THE HINDU group of publications
Friday, Aug 11, 2006


News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Industry & Economy - Fertilisers
Web Extras - Policy
Dept of Fertilisers asked to take a fresh look at urea pricing policy

Ambarish Mukherjee

Secys' panel sees present draft as continuance of status quo


"Now the CoS has asked the Ministry to look at the issues of efficiency, number of groups and what specific improvements could be made with regard to various units."

New Delhi , Aug. 10

The Government's two years' effort since 2004 to prepare a tailor-made policy for the third phase of the new urea pricing scheme that was to become operational from April this year appears to be elusive with the Committee of Secretaries (CoS) asking the Department of Fertilisers to take a fresh look at the draft proposal.

The draft policy for the third phase was sent back by the Cabinet Committee on Economic Affairs (CCEA) in the last week of July and was referred back to the Committee of Secretaries.

CoS plea

The CoS, which met last week, has now asked the Ministry of Fertilisers, Chemicals and Petrochemicals to make specific improvements in the proposal.

Informed sources told Business Line that the committee has observed that the third stage is quite similar to the second and in particular it would amount to continuance of status quo.

"Now the CoS has asked the Ministry to look at the issues of efficiency, number of groups and what specific improvements could be made with regard to various units."

Conversions

Another very specific subject is the conversion of naphtha-based units to gas-based ones.

"The issues are how much time would be needed for conversion of the units and how much time should be given for the conversions. To what extent the time frames can be compressed. The aim would be to give as little time as possible and complete as early as possible," sources said.

The Ministry would now deliberate on the suggestions of the CoS and has been asked to get back to the committee in 15 days, sources said.

Objective

The objective of the new three-staged pricing policy for urea manufacturing units, which came into effect from April 2003, was to bring in greater transparency, uniformity and efficiency in subsidy payments to the fertiliser companies when it was also decided that the modalities for the third stage would be decided after review of the implementation of the first two stages.

In the first two stages, the manufacturing units were divided into six groups based on vintage and feedstock for determining their respective subsidy rates.

The groups were pre-1992 gas-based units, post-1992 gas-based units, pre-1992 naphtha-based units, post-1992 naphtha-based units, fuel oil/low sulphur heavy stock (FO/LSHS) based units and mixed energy based units.

In the existing system, there had been several calculation-related issues last year for units changing over from one to another feedstock for specific periods leading to delays in payments.

The Ministry would also look into this aspect while deciding on changes in the draft that would be sent to the committee, sources said.

Related Stories:
Govt may control urea distribution
Fertiliser subsidy to exceed Budget estimates
Total subsidy may cross Rs 24,000 crore

More Stories on : Fertilisers | Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Plan to beef up medium-range weather forecast under study


Rainbow of hope?
Chemical industry worried over ethanol-blending plan
HC stays BPL Mobile shares sale
ICAI regional conference starts today
Engineering exporters assured of level playing field
Dept of Fertilisers asked to take a fresh look at urea pricing policy
Tajik President visits BHEL unit
`Indo-Thai trade prospects bright under Framework pact'
`Japan-India economic ties not fully tapped'
Commissioning of LNG terminal at Ratnagiri delayed
Kerala VAT collection shows improvement
TN sales tax exemption hailed
Bharath Pitstop gets recognition
Sri Lankan Govt needs strategic vision to resolve conflict
Star News' interactive news channel
IIM-K seminar on IT management
Electrical goods industry seeks single window clearances
CII, FICCI decry ban on colas
Diamond units' plea to revive trade
Residency to host `Chocolate Festival'
Crisil assigns below average rating to two initial public offerings
Leave the tribals alone
Backward area fund gets nod
MMTC, PEC pass over urad, moong import tenders
Airtel, Hutch, Idea join hands to ease congestion during crises
No collateral for loans up to Rs 10,000 for flood-affected
PM to visit Nanded today
Banks to give prompt flood relief in AP
PM to tour flood-hit States
Deora reviews impact of floods in Gujarat
BoB to recast Gujarat operations
ONGC declares force majeure on naphtha
Call for regulatory mechanism to preserve eco sensitive regions
Workshop on hospital accreditation


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line