Government to Stop Gas Supply to Deepak Fertilizer: Report
The government will stop supply of KG-D6 gas to phosphatic and potassic (P&K) fertiliser plants of firms like Deepak Fertilizer Ltd and restrict supply of cheaper domestic gas to urea manufacturing units only.
The Fertiliser Ministry last week wrote to the Oil Ministry seeking immediate stoppage of 0.5 million standard cubic meters per day of gas from Reliance Industries' eastern offshore KG-D6 field being sold to P&K fertiliser plants.
"We received a two-page letter from them (Fertiliser Ministry) on Friday. We will act on it," a senior Oil Ministry official said.
An Empowered Group of Ministers (EGoM) headed by the then Finance Minister Pranab Mukherjee had in early 2012 put on hold the proposal to suspend supply of KG-D6 gas to P&K plants of Deepak Fertilizers, Gujarat State Fertilizer Corp and Rashtriya Chemicals and Fertilizer till May 25, 2012.
The Department of Fertiliser was asked to calculate the gains made by companies using KG-D6 gas in manufacture of fertilisers other than urea. The gain made in manufacture of P&K fertiliser using cheaper gas, was to be recovered from these units.
However, the Department of Fertiliser did not formulate the guidelines for the same and natural gas supplies to P&K plants continued for almost two years beyond the stipulation laid by EGoM.
The official said now the Department of Fertiliser has written to the Petroleum Ministry seeking stoppage of gas to P&K units.
In view of limited supply of domestic gas, the Ministry of Petroleum & Natural Gas (MoPNG) had in December 2011 proposed to stop domestic supplies to the phosphorus and potash (P&K) fertiliser units.
It had proposed to EGoM that "The allocation to Deepak Fertilizer may be cancelled and MoPNG be authorised to cancel any other KG-D6 allocations for P&K plants or any allocation in which KG-D6 gas is being used for P&K fertiliser. Further, KG-D6 gas allocations in the future, be made only to urea fertiliser plants."
However, the EGoM modified this to say that, "The supply of KG-D6 gas to P&K plants (Deepak, GSFC and RCF) may be suspended till guidelines as proposed by DoF as issued. Further, KG-D6 gas allocations in the future should only be made to urea fertiliser plants."
Later, the EGoM kept this decision in abeyance till May 25, 2012, the official said.
Fertiliser plants that face supply cut will have to substitute domestic gas with costlier imported liquefied natural gas (LNG).
The official said that total domestic gas supply to urea making fertiliser plants will continue to be maintained at 31.5 mmscmd as had been decided by EGoM in 2013. This included 0.5 mmscmd gas being consumed by P&K plants.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
