Government set to hike nutrient-based subsidy rates on fertilisers

The government has announced a hike in the benchmark import prices of di-ammonium phosphate (DAP) and muriate of potash (MOP) used for determination of the nutrient-based subsidy (NBS) rates for various fertilisers.

The move follows approval of higher import parity prices of $612 a tonne for DAP and $420 a tonne for MOP by an inter-ministerial panel under the secretary, Department of Fertilisers, reports said. The existing levels are $580 and $390, respectively.

With the revision, NBS rates would increase with increase in the prices of phosphorus (P) and potash (K). At present, the NBS rate on P, linked to a $580-a-tonne reference price for imported DAP, is Rs29.407 a kg and the proposed $612-benchmark price would push it to around Rs31 a kg.

Similarly, the NBS rate on K would increase from Rs24.628 to Rs26.5 a kg with the assumed landed price being raised to $420 a tonne.

Under the NBS regime, 22 non-urea fertilisers are covered with the subsidy payable on each linked to their nutrient content.

The centre had, on 9 March, notified the per-kg NBS rates for 2011-12 at Rs27.481 on N (nitrogen), Rs29.407 on P, Rs24.628 on K and Rs1.692 on S (sulphur), benchmarked to the corresponding landed prices of $350, $580, $390 and $180 a tonne for urea, DAP, MOP and sulphur.