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The Cabinet Committee on Economic Affairs (CCEA) approved the continuation of urea production by Madras Fertilizers Ltd (Manali), Mangalore Chemical and Fertilizers Limited (Mangalore) and Southern Petrochemicals Industries Corporation (SPIC, Tuticorin). The three companies use naphtha as feedstock.
The process will continue till natural gas is made available through pipelines or other means, Fertiliser Minister Ananth Kumar told reporters here on Wednesday.
The Tamil Nadu and Karnataka Governments have been directed not to charge VAT or entry tax on the naphtha/FO as decided earlier at a CCEA meeting in December.
Besides these three units, there are two other urea units at Kakinada in south India. “If these three units would have been closed, then the entire requirement of the southern region would have had to be sourced mainly through imports,” said an official release.
The three naphtha-based units have an annual capacity of 14.88 lakh tonnes (lt) and cater to a large part of the total demand (of around 22.5 lt through the year) in Karnataka, Tamil Nadu and Kerala.
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