Production cost of urea to fall? Nitin Gadkari says govt working on it; eyeing plant in Iran


The NDA government is making efforts to bring down the cost of production of urea and exploring the option of setting up a plant in Iran using cheaper gas, Union Minister Nitin Gadkari said today.

He also said that the government is looking at producing urea using surplus coal in the domestic market.

Gadkari also criticised the previous UPA government for considering Iran’s offer of supplying natural gas at USD 1/mmbtu, which could have helped in bringing down the production cost of urea sharply.

India’s urea output touched a record 24.5 million tonne in 2015-16. The country imports about 7-8 million tonne to meet the domestic demand.

“For the first time, our government is taking efforts to bring down the cost of production of urea,” Gadkari said while addressing a farmers’ conclave organised by BJP’s Kisan cell.

To bring down the cost of production of urea, the government plans to set up a plant in Iran if the Persian country agrees to supply natural gas at cheaper rate, he said.

“We are talking with them (Iran). A big urea plant will be set up there and urea produced there will be brought to Kandla port for distribution in the country,” he said, adding that India is still negotiating to bring down the gas price below USD 2 mmbtu.

On producing urea using domestic coal, the Minister said urea — which is manufactured using coal — is being imported from China. It is cheaper by Rs 10,000-12,000 per tonne as compared to urea manufactured by gas (Rs 20,000 per tonne).

“The country has huge reserve of coal. Our government has decided to produce urea using surplus domestic coal. In Odisha, we are planning to manufacture urea using coal. For which, there is a need to allocate coal blocks,” he added.

On diversion of urea, Gadkari said that introduction of neem coasted urea has stopped smuggling and diversion of this fertiliser to chemical factories. This has saved subsidy and improved supply in the country.