Lok Sabha Question No. 796 (UNSTARRED), answered on 2016-03-01
Subject: New Urea Policy 2015
Ministry: CHEMICALS AND FERTILIZERS
Asked by: VINOD KUMAR BOIANAPALLI

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

## UNSTARRED QUESTION NO 796 TO BE ANSWERED ON 01.03.2016

New Urea Policy 2015

## 796: SHRI B. VINOD KUMAR:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether the Government has announced the New Urea 2015 with the aim of maximizing indigenous urea production, promoting energy efficiency in urea production, and rationalizing subsidy burden on the Government; and Policy
- (b) if the details thereof? SO,

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI HANSRAJ GANGARAM AHIR)

(a) & (b) Yes, Madam: The Government has announced the New Urea 2015 on 25thMay, 2015 with the objectives of   maximizing   indigenous urea production; promoting urea production; and rationalizing subsidy burden on the government: A copy of the said policy is annexed: Policy

To,

CMDIMDs

## based urea manufacturing units. New Urea Policy-2015 for existing Subject: gas

12012/3/2010-FPP dated 2d to refer to this Department's letter No: am directed New Pricing Scheme (NPS)-III was vide which the salient features of Modified decided to April 2014, communicated. It has been introduced as contained in the succeeding paragraphs. implement New Urea Policy-2015

## 1. Duration

June 2015 to 31.3.2019. The Urea Policy-2015 will be effective from The New New Investment Policy 2008 shall of existing Modified NPS-III and provisions continue till 31st May 2015. 1st

## 2. Grouping\_ofurea\_units

- urea units   having   pre-set  energy norms Group-I includes the   following between 5.0 G CallMT to 6.0 G Call MT:
- units will be classified into the following three 2.1 The existing gas based urea groups;
- NFL Vijaipur-I & Il, Kribhco Hazira, Indo-Gulf -Jagdishpur, IFFCO \_

NFCL-Kakinada-I & Il and IFFCO-Phulpur-II (Thirteen units).

Aonla -1 & Il, KSFL-Shahjahanpur; CFCL Gadepan-| & Il, TCL-Babrala,

- Group-Il includes the following urea units   having pre-set energy norms between 6.0 G CallMT to 7.0 G Call MT:
- a. IFFCO-Kalol, GSFC-Baroda, RCF-Thal and GNVFC-Bharuch (Four Units)
- Group-IIl includes the following urea units   having pre-set energy norms more than 7.0 G CallMT:

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## No 12012/1/2015-FPP Government of India Ministry oi Chemicals & Fertilizers (Department of Fertilizers)

Shastri Bhawan; New Delhi:

- NFL-Panipat NFL-Bhatinda, ZACL-Goa, SFC-Kota\_ 3, RCF-Trombay-V; IFFCO-Phulpur-| ard KFCL-Kanpur (Eight units).
- Namrup-Il and BVFCL Namrup-IIl are proposed to be closed and 2.3 BVFCL to irstall a new high efficiency unit and be dealt separately under their Till then, these two units will function under the restructuring proposal: provisions of Modified NPS-IIL will
- 2.2 MCFL-Mangalore, SPIC Tuticorin, BVFCL Namrup-Ii and BVFCL Namrup-IIl will not be covered under this scheme because these units are not connected to gas pipeline network in the country:
- 2 4 The twenty five units in para 2.1 above; will be eligible to the concession on the basis of revised energy norms fixed for each group from 1s' June rate 2015 to March; 2018, get 31St
- 3.1 For the year 2015-16 (from 1st June 2015 onwards) , 2016-17 and 2017-18, norms would be the simple average of pre-set energy norms of the revised energy NPS-Ill and average actual energy consumption achieved during the years 20112012-13 and 2013-14 or the pre-set set energy norms of NPS-Ill; Whichever is 12

## 3 Revised Energy Norms for three years (2015-16 to 2017-18)

## 3.2 Energy Norms for the year 2018-19

## a) For Group [

norm for this group for financial year 2018-19 would be 5.5 Energy consumption For TCL- Babrala, existing pre-set energy 5.417 G CallMT will continue consumption

## b) For Group Il

## c) For Grcup IlI

norm for this group for financial year 2018-19 would be 6.2

norm for this group for the financial year 2018-19 would be Energy consumption

- provisions for conversion of FOILSHS urea units to Natural Gas 3.3 The present issued by the Department of Fertilizers for urea units at Bathinda, Nangal & Panipat of NFL and Gujarat Narmada Valley Fertilizer Corporation- Bharuch will continue
- 3.4 The units which have converted to gas Naphtha viz. ZACL and KFCL will continue t0 saving on energy consumption over the pre-set norms of NPSIII to recover their investment for conversion from Naphtha to Natural Gas. The data from each such unit will be obtained and based on this the Department of Fertilizers, in consultation with Department of Expenditure, shall work out the period for which existing pre-set energy norms will be allowed, which shall not be more than five years from the date of conversion s0 that each unit may be in & position to recover the investment with interest thereon from energy savings. from get data,
- The compensation for other variable cost e.g. the cost of water charges & electricity charges and fixed cost will be determined in accordance with existing provisions of NPS-III and Modified NPS-III. bag,
5. For production beyond the Re- Assessment Capacity (RAC), the units will be entitled for their respective variable cost and a uniform per MT incentive equal to the lowest of the per MT fixed costs of all the indigenous urea units subject to import parity   price plus   weighted average of other incidental   charges which the government incurs on the imported urea.
- 6 All other existing policy guidelines related to escalation/de-escalation of concession rate, Neem coated urea, distribution and movement; import of urea and taxes on inputs for urea production and freight reimbursement, issued by this department from time t0 time will continue\_
- 7 In case any modification of the policy is required in relation to the operational issues, which does not alter the basic framework of the policy i.e. pooling of gas and energy efficiency target and is financially beneficial to the Government; the Department of Fertilizers is authorized to take a decision in   the matter in

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Yours faithfully,

(Sham-Lal Goyal}

Joint Secretary to the Goverment of India 011-23388481

Copy to:

The Executive Director,

Fertilizer

8th Floor, Sewa Bhawan, R K Puram; New Delhi.

Industry Coordination Committee ,

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## No. 12012/1/2015-FPP Government of India of Chemicals & Fertilizers (Department of Fertilizers) Ministry

To Executive Director, Coordination Committee , 8in Floor; Sewa Bhawan; R K Puram, Delhi, The Fertilizer Industry New

Shastri New Delhi: Dated Bhawan;

Subject: New Urea Policy-2015 for existing gas based urea manufacturing units.

Sir,

In continuation of this departments notification of even number dated 25th 2015 on the above mentioned subject; am directed to state the following: May

- For para 5 of New Urea -2015 following clarification is issued: Policy being
- provisions of above notification will be applicable to all gas based existing indigenous urea units excluding BVFCL Il & III with L-12022 /3/2015-6 the policy notification GP-Il dated 20th 2015 regarding guidelines for pooling of gas in fertilizers (urea) of of Petroleum and Natural as amended on 29th 2015 to make it effective The along May Ministry Gas May, from
- variable cost referred in para 5 will be same as applicable up to re-assessed capacity. The
- This Department will quarterly notify the total incidental expenditure incurred the quarter on imported urea in Rs. per Metric Tonne exclusive of Custom Duty: during
- b The Import Parity Price (IPP) of urea will be calculated quarterly on the basis of weighted average CFR (Cost; Insurance and Freight) price the quarter at Indian port on government account by designated urea importing agencies from international market. during
- d The IPP and incidental expenditure incurred on imported urea in a quarter will be notified within one month from the end of the quarter. If there is no import the quarter, then IPP and incidental during

expenditure incurred on imported urea the previous quarter shall be applicable\_ during

- e RAC means Re-assessed Capacity of a urea unit
- benefit on account of energy will be calculated based on monthly pooled price of gas excluding transportation and applicable taxes i.e. basic rate only. The savings

to; Copy

CMDIMDs

ZACLI RCFIMFLBVFCLUNFLIKRIBHCOIFFCOIGSFCIGNVFCISFCINFCLCFCL ITCLI INDO-GULFISPICIKSFLIMCFLIFCILHGCLFACTIIPLMMATIXIKFCL'

also to: Copy

PPSto Secretary (MoPRNGYPPS to Secretary JS (Fertilizers)IPPS to SS&FA PPS to (SLGYPPS to JS (SKLYPPS to JS (HLS)

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Yours faithfully,

(Vijay Ranjam Singh)

Director (F)

011-23386398