Govt hikes retail price of urea by Rs 50/tonne

Govt hikes retail price of urea by Rs 50/tonne

Aiming to shift towards direct transfer of fertiliser subsidy to farmers, the government today hiked retail price of urea marginally by Rs 50 to Rs 5,360 per tonne for incentivising retailers to provide receipt of fertilisers stock received by them for sale.

The hike, which was approved today by the Cabinet Committee on Economic Affairs (CCEA), would be effective from next month. For farmers, urea will now become costlier by Rs 2.50 per bag of 50 kg.

"The CCEA decision to increase the maximum retail price (MRP) of urea by Rs 2.50 per bag or Rs 50 per tonne is to provide an incentive to the retailer to give acknowledgement of fertilisers that he has received from the manufacturer/ importer or wholeseller," an official statement said.

The decision to incentivise retailers has been taken in the context of the phased implementation of the project for the direct transfer of subsidy to farmers, it said.

The Fertiliser Ministry explained that retailers are supposed to acknowledge the receipt of the fertilisers either through the SMS-based application or through the web application.

"This phase is currently getting consolidated and will lead to the greater transparency in the movement of fertilisers and availability at the farm gate. It also aims to prevent black marketing and use of subsidised urea fertilisers for industrial purpose," it noted.
The maximum retail price (MRP) of urea was last increased by 10 per cent to Rs 5,310 per tonne in April, 2010.

The urea production in the country is around 22 million tonnes and 7-8 million tonnes is met through imports.

In case of urea, the government fixes the MRP and the difference between the MRP and production cost is reimbursed by the government in form of subsidy to fertiliser companies.