Page 156 - CW E-Magazine (6-8-2024)

Fertilisers Hydrocarbons

TRADE TRENDS RULE CHANGES

Overall fertiliser sales up in April-May, but DAP Older petroleum product pipeline tariff to rise after

offtake drops PNGRB’s new regulation

Fertiliser sales in India increased by There has been a marginal drop ment was informed recently. In a writ- Tariffs for older petroleum pro- much lower than those for the other two lation, Reliance Industries had opposed
3.6% to 50.7-lakh tonnes (lt) in April- in urea imports to 6.4-lt (6.92-lt) in ten reply to the Lok Sabha, Minister duct pipelines will increase 17% from sets of pipelines, said Mr. Pankaj Bhu- the idea of an annual pipeline tariff
May of the current fi scal as good rain- April-May. of State for Chemicals and Fertilisers August and rise 3.4% annually from tani, head of commercial at PNGRB. escalation of 3.4%. GAIL and HPCL
fall in the growing areas had helped Ms. Anupriya Patel said, “The govern- next year to account for infl ation and to “The share of transport tariff in product had asked for an annual escalation of
increase the offtake. At the same time, Overall import of fertilisers dropped ment provides subsidy to ensure ensure a reasonable return to operators, price is barely 2-3% and so would have 4.5% and 5%, respectively.
the rise in sales is attributed to the base by 12.5% to 24.5-lt (28-lt) with com- adequate availability of fertilisers the Petroleum and Natural Gas Regula- little impact on product prices. Second,
effect as there was a 3% drop during plex fertiliser imports declined by at affordable prices to the farmers. tor Board (PNGRB) has said. most of the older pipelines are used for “Indian Railway freight runs on a
April-May 2023, and nearly 2% in the 22.1% to 4.5-lt (5.78-lt) and that of Under ‘DBT in Fertilizers’ system, 100% captive purposes and the tariff is only macro-economic model and does not
year to 48.9-lt. DAP by 18.8% to 8.5-lt (10.47-lt). MoP subsidy on various fertiliser grades is PNGRB has issued a new tariff regu- notional,” he said. account for the costs incurred by pipe-
imports surged 5.6% to 5.1-lt (4.83-lt). released to the fertiliser companies, on lation, which will apply from August line entities. There is also no assured
Diammonium phosphate (DAP) actual sales to the benefi ciaries based 1 and replace the one that has existed For pipelines operating before rate of return in railway tariff,” said the
sales, however, declined by 9.3% to Total fertiliser output rose to on Aadhar authentication through POS since December 2010. The new regula- December 2010, the tariff shall be 75% regulator, justifying the escalation.
8.8-lt, which could put downward 503.35-lt last fi scal from 485.290-lt (point-of-sale) devices installed at tion applies to all three sets of product of the basic railway freight for all
pressure on global prices. lakh in 2022-23. each retail shop.” pipelines, including the ones that came petroleum products except LPG for which For the product pipelines that
before December 2010 and after that it would be 100%. This benchmarking began operating after December 2010,
MoP sales up 52% Rs. 37.000-crore provided as fertiliser According to government data, and the pipelines that were built follow- with the rail freight in the new regula- the tariff shall be determined using the
Overall consumption of urea in fi rst subsidy in current fi scal the total fertiliser subsidy stood at ing a competitive licensing bid. tion is the same as in the old. The new discounted cash fl ow method with 12%
two months of current fi scal increased The government has provided Rs. 36,993.39-crore till July 22 of the regulation provides for an annual post-tax returns on capital employed
2% to 31.8-lt (31.2-lt). Similarly, nearly Rs. 37,000-crore fertiliser 2024-25 fi scal. In the previous fi nan- “This reform aims to provide the escalation of 3.4% per year based on the over their economic life. The new regu-
Muriate of Potash (MoP) rose 53.2% at subsidy so far this fi scal to ensure cial year, the subsidy has gone fi nancial stability and attractiveness trailing 10-year compounded annual lation will also impact the pipelines
1.7-lt (1.11-lt) and complex fertiliser adequate supply of crop nutrients to down to Rs. 1,95,420.51-crore from needed to boost pipeline infrastructure growth rate of the wholesale price index whose tariffs for the fi rst ten years of
increased by 21% to 8.4-lt (6.94-lt). farmers at affordable prices, Parlia- Rs. 2,54,798.9-crore in 2022-23. growth in India,” said Mr. Anil Kumar (WPI). Since the railway tariff hasn’t operation were discovered in an auc-
Jain, chairperson of PNGRB. been revised since 2018, a one-time tion. Their tariff from the eleventh year
LONG TERM EXPERIMENTS
escalation of 17% has been provided of operation will be determined using
Integrated nutrient management maintains soil Despite a 17% hike in the rail- to account for fi ve years’ infl ation. the discounted cash fl ow method with
way-derived tariff for these pre- 12% returns over the remaining eco-
fertility: ICAR study PNGRB pipelines, the tariff will remain During the consultation for the regu- nomic life.
Long term fertiliser experiments According to ICAR, the nitrogen Govt. drops plan to infuse Rs. 15,000-crore equity
conducted by the Indian Council use effi ciency of nitrogenous fertilisers
of Agriculture Research (ICAR) at varies between 30-50% depending on in OMCs
Ludhiana have revealed that integrated soil type and crop grown. Remaining
nutrient management practices main- nitrogen is lost mainly by way of nitrate The government has dropped plans the interim budget presented projects from the market at
tained soil fertility (organic carbon, leaching (causing nitrate contamination to infuse Rs. 15,000-crore equity in in February this year as competitive rates.
available nitrogen, phosphorus, potas- in ground water). The agency is hence IOC, BPCL and HPCL as state oil mar- companies started turning
sium with improved biological acti- recommending soil test based balanced keting companies (OMCs) have turned profi table. In the budget, the govern-
vity), while imbalanced use of chemi- and integrated nutrient management profi table. ment allocated Rs. 332-crore
cal fertilisers resulted in decrease in practices through conjunctive use of IOC, BPCL, and HPCL for ‘Mission Anveshan’ or
soil fertility. both inorganic and organic sources The government did not allocate have reported a combined research in the petroleum
(compost, bio-fertilisers, green manure, capital for infusion in state oil com- profi t of Rs. 80,986-crore in 2023-24 sector, and another Rs. 388-crore for
Studies on rice-wheat system with etc.), split application and placement panies in the latest budget. It had al- against a profi t of Rs. 1,138-crore in the appraisal of areas in India’s extended
integrated nutrient management for 30 ever, fertility of soil is lost mainly due of nitrogenous fertilisers, use of slow located Rs. 30,000-crore in last year’s previous year. From the very beginning, continental shelf. The allocation for ap-
years in Punjab indicated no negative to the imbalanced use of chemical ferti- releasing N-fertilisers, nitrifi cation budget to help oil companies pursue oil companies were not excited about praisal of continental shelf would help
effect on soil organic carbon, available lisers coupled with low use of organic inhibitors and use of neem-coated urea green projects. The proposed amount, receiving equity from the government India’s bid to acquire more data on ex-
nitrogen (N) and phosphorus (P). How- manures. etc. to avoid such a situation. however, was cut to Rs. 15,000-crore in as they could easily borrow for green ploration potential.

156 Chemical Weekly August 6, 2024 Chemical Weekly August 6, 2024 157

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