Urea plants revival: PMO asks fertilizer department to draw up plans
NEW DELHI: Aiming to reduce urea imports, the Prime Minister's Office (PMO) has asked the Department of Fertilizers (DoF) to draw up plans for reviving two or more urea plants in the eastern parts.
In a high-level meeting last week at the PMO of the Secretary Fertilizer, the Secretary Petroleum and other senior officials including CMDs of PSUs, issues relating to raising domestic urea output by reviving closed plants and setting up Jagdishpur-Haldia pipeline were discussed, according to sources.
During discussions, officials discussed the ways and means to make domestic production of urea feasible compared to import prices, considered the need for guaranteed buyback and the requirement to set up Jagdishpur-Haldia gas pipeline for various industries including fertilisers, sources added.
India's urea output has remained stagnant at 22 million tonnes (MT) since 2007-08. The current demand is about 30 MT, forcing the nation to meet shortfall of 8 MT via imports.
New greenfield urea capacity has not been added in the country for more than a decade now.
Meanwhile, Prime Minister Narendra Modi in his first independence day speech also called for increasing the manufacturing facilities in the country in various sectors, including chemicals.
There is a view among officials that the country should raise domestic urea production so that by reducing its import dependency, the sudden spike in prices can be mitigated in the international market, sources added.
"At present, India accounts for 17-18 per cent of global urea demand. So as and when India enters global urea market, the prices shoot up, increasing our financial burden," sources said.
In the year 2013-14, the average price of imported urea was about USD 320-325 per tonne, besides the urea imported from OMIFFCO in Oman where country has fixed off-take agreement at the price of USD 170-180 per tonne.
In the same year urea's domestic cost of production for the gas based plants was Rs 18,502 per tonne. In case of feedstock other than gas, the cost was around Rs 45,525 per tonne.
At present, eight urea units belonging to PSUs are closed including five of Fertiliser Corporation of India (FCIL) and three units of Hindustan Fertilizer Corporation (HFCL).
Fertilizer Minister Ananth Kumar had already held various meetings with Petroleum Minister Dharmendra Pradhan to discuss a number of issues, including supply of gas to the urea plants, Jagdishpur-Haldia gas pipeline and revival of closed urea plants using gas as feedstock.
In a high-level meeting last week at the PMO of the Secretary Fertilizer, the Secretary Petroleum and other senior officials including CMDs of PSUs, issues relating to raising domestic urea output by reviving closed plants and setting up Jagdishpur-Haldia pipeline were discussed, according to sources.
During discussions, officials discussed the ways and means to make domestic production of urea feasible compared to import prices, considered the need for guaranteed buyback and the requirement to set up Jagdishpur-Haldia gas pipeline for various industries including fertilisers, sources added.
India's urea output has remained stagnant at 22 million tonnes (MT) since 2007-08. The current demand is about 30 MT, forcing the nation to meet shortfall of 8 MT via imports.
New greenfield urea capacity has not been added in the country for more than a decade now.
Meanwhile, Prime Minister Narendra Modi in his first independence day speech also called for increasing the manufacturing facilities in the country in various sectors, including chemicals.
There is a view among officials that the country should raise domestic urea production so that by reducing its import dependency, the sudden spike in prices can be mitigated in the international market, sources added.
"At present, India accounts for 17-18 per cent of global urea demand. So as and when India enters global urea market, the prices shoot up, increasing our financial burden," sources said.
In the year 2013-14, the average price of imported urea was about USD 320-325 per tonne, besides the urea imported from OMIFFCO in Oman where country has fixed off-take agreement at the price of USD 170-180 per tonne.
In the same year urea's domestic cost of production for the gas based plants was Rs 18,502 per tonne. In case of feedstock other than gas, the cost was around Rs 45,525 per tonne.
At present, eight urea units belonging to PSUs are closed including five of Fertiliser Corporation of India (FCIL) and three units of Hindustan Fertilizer Corporation (HFCL).
Fertilizer Minister Ananth Kumar had already held various meetings with Petroleum Minister Dharmendra Pradhan to discuss a number of issues, including supply of gas to the urea plants, Jagdishpur-Haldia gas pipeline and revival of closed urea plants using gas as feedstock.