New Delhi: Concerned over the rising fertiliser subsidies, Chemicals and Fertiliser Minister Ram Vilas Paswan has sought early gas connectivity for fertiliser units to augment domestic output and reduce import dependence.
According to government sources, the Minister has written to the Empowered Group of Minister on gas, headed by External Affairs Minister Pranab Mukherjee, to give a clear direction to Gas Authority of India Limited (GAIL) as to when would it complete connection of grids under the Hajira-Bijapur-Jagdishpur pipeline project.
“GAIL should give a roadmap as by when would it begin work on the connectivity project and also by when will that be completed,” a source in the Fertiliser Ministry said.
“In the absence of connectivity, the gas-sale agreement is not being signed between the potential investors and GAIL, a reason why bankers are not ready to finance the urea projects in the pipeline,” he added.
Paswan has warned that India may lose Rs40,000 crore investment in the urea sector if the proposed industries are not provided timely gas connection to run their operations.
At present, there are 30 urea units in the country, which require 40 mmscmd of gas against which the supply is pegged at 29 mmscmd.
However, if the requirement from the proposed revival of eight sick units as also fresh investments lined up in the sector is taken into account, then the demand would shoot up to 95 mmscmd.
India’s fertiliser subsidies are expected to go up to Rs1,19,000 crore in 2008-09 fiscal, against Rs40,338 crore last year. The country imported about 50 lakh ton of urea during last fiscal but this year the import is expected to reach about 80 lakh ton.
The demand for urea was 250 lakh ton last year against a domestic production of 200 lakh ton.