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Fertilizer Units Urge Govt to Maintain LNG Supply

  • Anticipating a sharp hike in fertilizer prices following the the petroleum & natural gas ministry’s move to cut supplies of natural gas to the potassic and phosphatic fertilizer producing companies, Punjab’s premiere agriculture cooperative, Markfed, has now sought the intervention of Finance Minister Pranab Mukherjee.In a letter written to Mukherjee, who also heads the empowered group of ministers (EGoM) for the new exploration and licencing policy on gas, Markfed chairman Jarnail Singh Wahid has urged the government not to restrict or withdraw natural gas supply to fertilizer producers.
  • “The move can push up the cost of fertilizers as producers will have to import these. Since phosphatic fertilizers including complex fertilizer has a crucial role in plant growth and enhancement of crop yields, these fertilizers, including potassic ones are well received by farmers in the region,” he said.Farmers and agricultural policy makers have expressed apprehension over the fact that with fertilizer producers, which are using natural gas as feedstock, becoming dependent on LNG imports, the cost of fertilizers will rise drastically and add to inflationary pressure on food items. It may be mentioned while domestically produved natural gas is available at about US $5 per mBTU (million British thermal units), the imported gas would cost close to $20 per mBTU.
  • It is learnt the petroleum & natural gas ministry had proposed to withdraw natural gas supplies to fertilizer companies in order to prioritize allocation of natural gas for power utilities.However, at the same time, the ministry intends to continue support to nitrogenous fertilizer units that produce the heavily subsidized, overused, and soil acidifying basic fertilizers.The letter has been sent to Mukherjee for his consideration before the next EGoM meeting, scheduled for later this week.In his letter, Wahid has also mentioned even if the fertilizer producing companies consider using other options for natural gas, the increase in fertilizer prices would be passed on to farmers — which he said was neither advisable nor desirable.

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