What is New Urea Policy (NUP) 2015?

  • The New Urea Policy-2015 (NUP-2015) notified by Department of Fertilizers on 25th May, 2015, and made effective from 1st June, 2015 upto 31st March, 2019.
  • The objective of policy was to maximize indigenous urea production, promoting energy efficiency in urea production and rationalizing subsidy burden on the government of India.
  • NUP – 2015, allowed 25 gas based urea manufacturing units to get the concession rate on the basis of revised energy norms fixed for each group from 1st June, 2015 to 31st March, 2018 which is the simple average of pre-set energy norms of NPS-III and average actual energy consumption achieved during three years (from 2011-12 to 2013-14) or the pre-set set energy norms of NPS-III, whichever is lower.
  • The urea manufacturing units were given target energy consumption norms to be achieved in the year 2018-19, to all three groups as per below:

Group-I – Energy consumption norms – 5.5 G Cal/MT (except Tata Chemicals Limited-Babrala for which existing pre-set energy consumption norm of NPS-III i.e. 5.417 G Cal/MT will continue).

Group-II – Energy consumption norms – 6.2 G Cal/MT

Group-III – Energy consumption norms – 6.5 G Cal/MT

  • The compensation for other variable cost e.g. the cost of bag, water charges & electricity charges and fixed cost are determined in accordance with existing provisions of NPS-III (notified on 8th March, 2007 ) and Modified NPS-III (2nd April, 2014).
  • 25 gas based urea manufacturing units are eligible to get total cost of production of urea, which includes fixed cost and variable cost, on the production upto 100% re-assessed capacity (RAC).
  • Production beyond RAC, these units are eligible for their respective variable cost and a uniform per MT incentive equal to the lowest of the per MT fixed costs of all the indigenous urea manufacturing units subject to IPP plus weighted average of other incidental charges which the government incurs on the imported urea.
  • GoI further amended vide notification dated 7th April, 2017, for production beyond RAC during 2016-17. As per this notification, units were eligible beyond their respective variable cost and a uniform per MT incentive equal to the lowest of the per MT fixed cost of all indigenous urea units subject to sum of IPP, other incidental charges which the Government incurs on the import of urea and weighted average of Central Government levies of urea paid by the urea manufacturing units. In event of any fluctuation in IPP that would have adverse impact on the production beyond RAC by urea units, DOF is authorized to take appropriate decision in consultation with Department of Expenditure.
  • MFL-Manali, MCFL-Mangalore, SPIC-Tuticorn, BVFCL-Namrup-II and BVFCL-Namrup-III are not covered under this scheme as these units are not connected to gas pipeline network.