UNFAIR VANTAGE IN UREA
Article Abstract:
The Pricing Policy Review Committee of India has recommended a normative referral price (NRP) of Rs6,050 per tonne for all the existing 15 gas-based urea plants with effect from January 1, 1998. Out of these, eight plants are along the HBJ pipeline and seven are situated on-shore/at landfall point. Plants located along the HBJ have to pay a basic price of Rs2,411 per thousand cubic metres, 10 percent royalty fee and central sales tax of 4 percent. They also have to pay transport charges, currently fixed at Rs1,150 per thousand cubic metres. Gas delivery charges will work out at about Rs3,630 per thousand cubic metres at CV of 8,500 K Cal or Rs425 per million K Cal. These plants pay for energy at an effective rate of Rs524 per million K Cal. For producing one tonne of urea, energy consumption will be about 6 million K Cal. Energy cost will be about Rs3,144 per tonne. This will exceed the provision under NRP by Rs744 per tonne. Such huge shortfall will affect the feasibility of these plants. (gs)
Comment:
India: Pricing Policy Review Committee proposes normative referral price of Rs6,050/tonne for existing 15 gas-based urea plants
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1998
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INDO-OMAN $1.1-BN UREA JV RUNS INTO MORE TROUBLE
Article Abstract:
A consortium of international lenders has asked the Government of India to officially guarantee by the end of March 1999 the buyback of the entire urea to be produced by the $1.1 billion, 1.5 million tonnes Indo-Oman joint venture. It also wants an assurance that the Government would not impose import duties on the product ever. The fall in the price of urea from $115 to $70 per tonne, zero demand-supply gap in 1998 in India and the lowered sovereign rating of the country seemed to have influenced the decision of the lenders. The consortium, led by Banque Nationale de Paris, is to provide a loan of about $670 million. Other members of the consortium are the Arab Banking Corporation, JP Morgan, Sace of Italy, Lazard Credit Capital, Coface of France and ECGD of UK. (pn) (kvr)
Comment:
A consortium of international lenders has asked the Government of India to officially guarantee by the end of March 1999 the buyback of the entire urea to be produced by the $1.1 billion, 1.5 million tonnes Indo-Oman joint venture.
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1999
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