Fertiliser stocks jump as FM assures help to offset gas price hike

Chambal Fertilisers & Chemicals (up 7%), Coromandel Fertilizers (up 5.92%), Rashtriya Chemicals and Fertilisers (up 3.52%), National Fertilisers (up 2.21%), Tata Chemicals (up 1.94%), Zuari Industries (up 1.30%), GSFC (up 1.25%) and Deepak Fertilisers & Petrochemicals Corporation (up 0.70%), edged higher.

The BSE Sensex was up 457.77 points, or 2.43% at 19,333.72.

Finance Minister P Chidambaram today, 28 June 2013, said that the government would consider helping the power and fertiliser industries to cope with the doubling of domestic gas prices from 1 April 2014. The power and fertiliser ministries have raised the issue. The government can look at fixing the input costs for these sectors, he said. The issues will be addressed in course of time, Chidambaram said.

The government on Thursday, 27 June 2013, agreed to double natural gas prices to industrial and retail consumers to help fund investment in exploration and reverse declining domestic gas output. The price of gas could go up to $8.4 per million metric British thermal units (mmBtu), effective 1 April next year, from current $4.2 mmBtu. The government has accepted the Rangarajan Committee report on gas pricing. The committee had suggested revision in prices of natural gas every quarter until March 2017 and dismantling all controls on pricing of the fuel thereafter.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) today approved the disinvestment of 7.64% paid up equity capital of the National Fertilisers (NFL) that is approximately 3.74 crore shares. The disinvestment will be out of Government of India's (GOI's) shareholding of 97.64%, as per the Securities and Exchanges Board of India (Sebi) rules and regulations in order to make the NFL compliant to public share holding requirements.

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