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Cabinet Committee on Economic Affairs approved Urea Production from Naphta

Aug 29, 2014 16:33 IST

The Cabinet Committee on Economic Affairs  on 27 August 2014 approved the continuation of production of urea from 3 plants by using existing feedstock Naphtha for three months beyond 30 June 2014, that is from 1 July 2014 to 30 September 2014.

The three plants are:

• Madras Fertilizers Limited (MFL) Manali
• Manglore Chemicals and Fertilizers Ltd (MCFL) Mangalore
• Southern Petrochemical Industries Corporation (SPIC) Tuticorin

These three units would help Indian farmers in meeting the urea requirement in the ongoing Kharif season. This decision will ensure food security of the country.

On the basis of NPS-III, total cost of production of urea is calculated. The selling price of urea is fixed at 5360 rupees per tonne.

Background

Under the Modified New Pricing Scheme-Ill for existing urea units, only three naphtha based units that is MFL - Manali, MCFL-Mangalore and SPIC - Tuticorin were allowed to produce urea from naphtha as feedstock till 30 June 2014.

The Centre asked these firms to switchover to natural gas otherwise subsidy would not be given.

However, these fertilizers companies were unable to convert to gas from naphtha, as there were protests from farmers in Tamil Nadu who were against the laying of gas pipeline. Moreover gas was not available.

Is this article important for exams ? Yes53 People Agreed

DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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