Naphtha-Based Fertilizer Units in a Bind

  • A steep fall in prices of naphtha against natural gas has put three south-based fertilizer firms in a fix.
  • The Centre is keen that they switch over to natural gas at the earliest to produce urea, to avoid huge forego by way of subsidy.
  • The situation will turn for the worst for two of them — Madras Fertilizers Ltd. (MFL) and Southern Petrochemicals Industries Corporation (SPIC) — as they do not have access to natural gas till 2017.
  • Market sources said that the price difference between the naphtha and natural gas narrowed down to $1 from $3-4.
  • Naphtha-based urea makers are seeking a blanket permission from the Centre to use naphtha as a feedstock for a longer period.
  • Out of the 33 fertilizer firms in the country, MFL, SPIC and Mangalore Chemicals and Fertilizers Ltd. (MCFL) rely on naphtha as feedstock for the production of urea as they do not have connectivity to gas grid.