Pranab Mukerjee, the senior most minister in UPA Govt would sit along with group of Ministers to decide on decontrolling of urea prices today on Friday.
The draft policy has been made by Planning Commission member Saumitra Chaudhuri. It has suggested partial freeing of retail price of urea.The draft has also suggested hiking the rate by 10 per cent after a year of implementing the new policy.
After the GoM approval, the draft proposal would be sent to the Cabinet.
“The meeting of the GoM is scheduled on August 5 at 1700 hrs. The GoM will discuss the draft policy, prepared by the Committee of Secretaries (CoS) headed by Planning Commission member Saumitra Chaudhuri.
The CoS has noted that the gas price pooling model and freeing of urea retail prices would enhance domestic output, as the cost of production of gas-based units is much lower than the imported urea price.
As much as 80 per cent of India’s production of urea is gas-based and the urea manufacturers now buy gas from suppliers through separate Production Sharing Contracts.
The draft policy has also suggested that the government should purchase natural gas directly through the Fertiliser Industry Coordination Committee and supply to companies at a weighted average price.
Demand for urea is expected to rise to 30 million tones in the next five years. The domestic production remained stagnant at 21.2 million tonnes in 2009-10. After the GoM approval, the draft proposal would be sent to the Cabinet.