Govt almost doubles dealer's margin on urea to Rs 354/tonne

The government today almost doubled the commission to Rs 354 per tonne for fertiliser dealers selling urea through PoS machines, a move that will result in an additional subsidy burden of Rs 515.16 crore annually to the exchequer.

The revised margin will come into effect from April 1 uniformly for both private and institutional agencies, the fertiliser ministry said in a statement.

A higher margin to dealers will help in smooth implementation of the Direct Benefit Transfer (DBT) of fertiliser subsidy.

Currently, Rs 180 per tonne is paid as dealer's margin for sale of urea by private agencies and cooperatives, while Rs 200 per tonne margin is set for institutional agencies.

"Government has approved the revision of dealer's margin to Rs 354 per tonne to be paid uniformly to all dealers/ distributors for the sale of urea," the statement said.

The margin will be paid on the quantity of urea sold through point of sale (PoS) devices only, it said.

The step is likely to benefit approximately 23,000 dealers across the country by enhancing their financial viability post DBT implementation of fertiliser subsidy, it added.

The ministry has already rolled out DBT programme in most states. Urea is highly subsidised by the government and the maximum retail price now stands at Rs 5,360 per tonne.

The government bears about Rs 70,000 crore annually as fertiliser subsidy to provide cheaper nutrients to farmers.