Gas crunch major challenge before fertiliser sector: FAI official

Last year, fertiliser industry was supplied roughly 31.50 million standard cubic metres

The short supply of gas and capping of gas supply by the Centre was the biggest challenge facing the domestic fertiliser industry in India, an industry official said here on Thursday.

“Gas is the feedstock for the fertiliser industry and the short supply of gas is the biggest challenge before us at present,” Fertiliser Association of India Girector-General Satish Chander told Business Standard.

He said the fertiliser industry was the only industry that made optimum usage of gas without leaving any effluent or carbon footprint.

Last year, the fertiliser industry had been supplied roughly 31.50 million standard cubic metres (mscm) and the government has capped the supply at this level, Chander said.

“Although, the fertiliser industry has been accorded priority in gas supply followed by power sector, we are getting only about 62 per cent of our total gas requirement through such allocation,” he said. The rest of the requirement is being met through long-term contracts.

Further, he said 18 of the 31 indigenous fertiliser plants were incurring cash losses due to the pricing policy of the Centre that dictates retail prices and salary structures followed by them.

A majority of industrial input used by fertiliser companies, including gas, Liquefied Natural Gas (LNG), rock phosphate, ammonia, sulphur, and phosphorus are imported.

Fertiliser is a highly subsidised commodity and the Centre runs a subsidy bill of over Rs 75,000 crore for ensuring cheaper supply to farmers. The government provides 75 per cent subsidy on fertiliser.