Fertilizer Sector Current Affairs

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CCEA approves amendment to New Urea Policy-2015

The Cabinet Committee on Economic Affairs (CCEA) has given its approval for amendment in Para 5 of New Urea Policy (NUP), 2015.

The amendment is related to the production beyond Re-Assessed Capacity (RAC) and inclusion of Para 8 in NUP 2015 to protect the production beyond RAC by urea units and boost indigenous urea production in the country.

Key Facts
  • It also raises ceiling imposed on production beyond RAC during the year 2016-17 to enable all urea unit to produce additional production which otherwise were not able due to low Import Parity Price (IPP).
  • Further, Department of Fertilizers has been authorized to take appropriate decision in consultation with Department of Expenditure to address any future fluctuation in IPP that would have adverse impact on the production beyond RAC by urea units.
New Urea Policy 2015 
  • It was notified in May 2015 with the objective of maximising indigenous urea production, promoting energy efficiency in the urea units and rationalizing the subsidy burden on the Government.
  • Under it, it is mandatory for all the indigenous urea producers to neem coat 100% of their urea production with the objective of increase Nitrogen Use Efficiency, promote balanced use of fertilizers and prevent diversion of urea for purpose other than agriculture.

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India, Algeria mull fertilizer Joint Venture

India has shown keen desire to initiate a joint venture (JV) arrangement with Algeria for a multi-billion dollar fertilizer plant located in the North African country.

The proposal in this regard has moved to front burner following a meeting between Algerian Minister for Industry and Mining and Indian Minister of State for Chemicals in Algiers.

However no specific agreements were signed between both courtiers at the end of Vice-President Hamid Ansari’s three-day visit to Algeria.

Why India is forming JV with Algeria?

Phosphorus is one of three important elements in the chemical fertilizers that are most important in plant nutrition along with nitrogen and potassium. India, which has up to 96% phosphate dependency. Currently, India imports raw phosphate resources from a number of African countries including Tunisia, Egypt, Jordan and Syria and also from Russia, Canada and Israel among others. For India, forming JV Algeria will have major favourable food security implications and also could ease the fertilizer subsidy burden.

India-Algeria

India’s bilateral trade with Algeria currently stands at 1.5 billion dollars a year with the trade balance in Algeria’s favour given India’s import of oil and gas. The major item of exports from India to Algeria has been automobiles.

India-Hungary

Earlier, Vice-President Hamid Ansari had visited Hungary on as part of this two-nation trip (Hungary and Algeria). Both countries had signed two agreements including in the field of water management.

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Union Cabinet approves revival of defunct Fertilizer Units in Gorakhpur, Sindri and Barauni 

The Union Cabinet has approved the revival of three fertilizers defunct Fertilizer Units in Gorakhpur, Sindri and Barauni.

The three fertilizers units are: (i) Barauni (Bihar) unit of Hindustan Fertilizers Corporation Limited (HFCL), (ii) Urea unit of Fertilizer Corporation India Limited (FCIL) at Sindri (Jharkhand) and (iii) Urea unit of FCIL at Gorakhpur (Uttar Pradesh).

Key facts

  • These fertilizers units would be revived by means of Special Purpose Vehicle (SPV) of Public Sector Units (PSUs) through ‘nomination route’.
  • The SPV will include Coal India Limited (CIL), National Thermal Power Corporation (NTPC), Indian Oil Corporation Limited (IOCL) and FCIL/HFCL.
  • Revival of these fertilizers units will help to meet the growing demand of urea of Bihar, West Bengal and Jharkhand.
  • It will also ease the pressure on road and railway infrastructure due to long distance transportation of urea from Western and Central Regions. It will also help in saving Government subsidy on freight.
  • It will also accelerate the economic development of the region and create opportunities for 1200 direct and 4500 indirect employments.

Background

  • These three units were lying defunct since their closure during 1990-2002. Therefore, the units and other associated facilities were lying unutilized.
  • There closure had resulted in lack of functional urea unit in the Eastern part of the country except two small units at Namrup (Assam).
  • Earlier in 2015, Union Government had approved revival of these three units through ‘bidding route’. However, the bidding process failed.

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