CCEA approves continuation of urea production from naphtha for three more months

The Cabinet Committee on Economic Affairs (CCEA) has approved the continuation of production of urea from three plants, Madras Fertilizers (MFL), Manglore Chemicals and Fertilizers (MCFL) and Southern Petrochemical Industries Corporation (SPIC), using naptha as feedstock for duration of three months ending on September 30. Previously, Modified New Pricing Scheme (NPS)-III, allowed production of urea naphtha as feedstock from MFL, MCFL and SPIC, for a period up-till June 30 this year.

This decision, which would also help in meeting the requirement of urea for Indian farmers in the ongoing kharif season, will ensure food security of the country. Further, all stake holders namely farmers, urea manufacturers in the country and the Government are expected to be benefitted by this move.

On the basis of NPS-III, total cost of production of urea or (concession price) was calculated and the selling price of urea was fixed at Rs 5,360 per tonne. During the year 2013-14, the cost of production of per tonne of urea from each of these units was more than Rs 43,000, while in case of units using domestic gas as feedstock the price hovers in between Rs 10,000-Rs 18,000 per tonne.