Decision on urea price hike put off

The Centre on Thursday deferred a decision on increasing retail prices of urea by 10 per cent following stiff opposition from Agriculture Minister Sharad Pawar.

The government has decided to revert back the proposal of urea price revision to the group of ministers headed by Finance Ministers Pranab Mukherjee for further discussion.

“It (the proposal on urea price increase) has gone back to the ministry. They have to take a second look at it,” Home Minister P Chidambaram told reporters after the CCEA meeting.

Urea is the only fertiliser that remains under full price control. Its current retail price is Rs 5,310 per tonne which was revised in 2010 from Rs 4,830.

Pawar, while opposing the hike, is learnt to have said the move will only benefit urea manufacturing companies and farmers will be forced to suffer with high price.

Sources said the Fertiliser Ministry expected that 10 per cent increase in price would help cut the subsidy by Rs 2,000 crore per annum on total fertiliser subsidy outgo which stood at Rs 24,500 crore last year. The other reason for bringing down the subsidy on urea was to redress imbalanced use of soil nutrient.

According to the industry, the annual demand for urea in the country is around 28 million tonne, of which 22 million tonne is indigenously produced and the rest is imported.

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