The department of fertilizers has approved new freight rates for direct movement of fertilizers by road for up to 500 km from plant/port to block level, as recommended by the Tariff Commission. This is expected to ensure timely and adequate availability of fertilizers to farmers at affordable prices, an official release stated.
The department has also decided to reimburse the freight cost in respect of secondary movement of fertilizers from rake point to district/ block headquarter on monthly basis at the lower of the normative per tonne per kilometer (PTPK) rate or actual expenditure incurred by the company. The decision comes into effect from Wednesday.
The decision will ensure availability of urea in remote areas, while keeping the cost under control. Besides, it will be help maintain the demand and supply uniform all over the country up to the block level and will benefit farmers during the peak demand season.
Fertilizer companies will not be allowed to do circuitous routing of fertilizers, which will save subsidy and promote efficient transportation of fertilizers. The district wise normative road freight rates have been computed in scientific manner in line with the policy.
According to the department, freight rate for urea his driven by considerations of serving the farming population at large, including those in remote and hilly areas.
According to a statement issued by the department, the intention of the government had never been to save subsidy by paying lower than the actual expenditure on freight. Uncertainty of freight subsidy, on the other hand, can disrupt supply and create scarcity amidst plenty. In this, distribution and movement of urea is as important as its manufacture if not more, it added.