Subsidy does not exist for new urea manufacturing units based on Naphtha as feed-stock, however GoI allowing only three old Naphtha based units (MFL, SPIC & MCFL) for subsidy till gas availability and connectivity to these three units either by gas pipeline or by any other means. GoI notified policy for Naphtha based urea manufacturing units, on 17th June, 2015 and these units will be eligible for subsidy as per the following conditions:
(i) Revised energy norms from the date of notification, which would be the simple average of pre-set energy norms of New Pricing Scheme (NPS) – III and lowest yearly specific energy consumption achieved during the years 2011-12, 2012-13 and 2013-14 or the pre-set energy norms of NPS – III, whichever is lower.
(ii) The concession rate for these plants will be determined notionally on the basis of weighted average of the delivered cost of RLNG to recently converted plants after deducting state taxes (VAT, Entry tax) on RLNG or the cost of production of urea from Naphtha/FO after deducting state taxes levied on Naphtha/FO consumed for urea production (VAT, Entry tax) on Naphtha/FO, whichever is lower.
(iii) The compensation for other variable cost e.g. the cost of bag, water charges & electricity charges and fixed cost will be determined in accordance with existing provisions of NPS – III and Modified NPS – III.
The specific energy consumption norms for these three units from 2018-19 was fixed as 6.5 Gcal/MT.
