The Centre will cut down the subsidy provided to the private firms, if they do not slash retail prices of non-urea fertilizers such as Di-ammonium Phosphate (DAP), Muriate of Potash (MoP) and NPK (Nitrogen, Phosphorus, and Potassium) by up to Rs 5000 per tonne. Retail prices of these fertilisers are decontrolled and are determined by the manufacturers, while the Centre gives them fixed subsidy each year.
Last month, the Fertiliser Ministry asked both public and private fertiliser companies to reduce the retail prices of non-urea soil nutrients and passed on same to the farmers as global prices of raw materials used in making complex fertilizers come down by $ 50-70 a tonne. Accordingly, state-run Rashtriya Chemicals and Fertilizers (RCF) and National Fertilizers (NFL) reduced the retail price of DAP by Rs 2,500 to Rs 22,000/tonne, MoP by Rs 5,000 to Rs 11,000/tonne, while complex fertilisers rates were brought down by Rs 1,000/tonne.
However, private firms did not cut the rates, Fertiliser Ministry has reportedly said that even the private companies have to reduce the prices. International prices have come down, they have to reduce the retail price. If they do not reduce the price, the subsidy will be cut down.
For this fiscal, total subsidy outgo is estimated to be Rs 21,274 crore for complex fertilisers. The cooperative major IFFCO and private companies Coromandel International, Deepak Fertilisers, Gujarat State Fertilisers and Chemicals, and Tata Chemicals have major share in these soil nutrients, whereas the PSUs held less than 10 percent.