May 17, 2012
India's urea price likely up 10%
This monsoon season and before the onset of the kharif season, the Indian government is contemplating to increase the price of urea by 10%.
Quoting unnamed sources, The Hindu Business Line reported that the Ministry of Chemicals and Fertilisers has moved a proposal to Cabinet Committee on Economic Affairs (CCEA) for price revision of fertiliser. It further adds that the committee is likely to decide the new pricing in a matter of couple of weeks.
Since April 1, 2010, when the last price revised to INR5,310 (US$97.7) a tonne from INR4,380 (US$80.6) a tonne, the price of urea have been not revised and a 10% hike will help in cutting the subsidy burden to central government's funds by around INR16 billion (US$294 million).
The price hike seems eminent as the Finance Minister Pranab Mukherjee voiced of some tough decisions after the budget session. On the positive side the government is looking to bring down subsidy under 2% in the current financial year and further below 1.75% by the fiscal 2016.