Cabinet hikes urea-based fertilizer price by Rs 50 per tonne

The Union Cabinet on Thursday agreed to hike the prices of urea-based fertilizers by Rs 50 per tonne.

The increase in prices will help reduce the government’s fertilizer subsidy bill, estimated to touch Rs. 65,000 crore this fiscal year.

The hike comes two weeks after Finance Minister P. Chidambaram wrote to Fertiliser Minister M.K. Alagiri, asking him to expedite the process of increasing urea prices.

With this increase, urea-based fertilizers will now cost Rs 5,360 per tonne, still a lot cheaper than potash and phosphate fertilizers, which cost Rs 24,000 per tonne.

The Union Cabinet also cleared subsidy transfer to farmers today.

“The Cabinet Committee on Economic Affairs has approved that the payment of fertilizer subsidy to companies will be based on the receipt of fertilizers, and the acknowledgement of receipts of fertilizers by the retailers (last point of sale of fertilizers),” a release by the government said.