The government’s fertilizer subsidy bill may exceed ₹2-lakh crore in the current fiscal as it has crossed 70 percent of the Budget allocation of ₹1.75-lakh crore in the last seven months. But with rising subsidy levels, the retail prices of non-urea fertilizers are likely to remain stable as the government has assured to take the burden.
“We had never allowed fertilizer shortages nor will allow ever. Globally, fertilizer prices rose everywhere but we did not allow it to rise in India,” Information Broadcasting Minister Anurag Singh Thakur said on Wednesday.
According to the latest data, the total fertilizer subsidy during April-October was ₹1,22,975.63 crore, of which ₹79,660.35 crore was spent on urea and ₹43,315.28 crore on phosphorus (P) and potash (K).
Of the total Budget allocation of ₹44,000 crore for P and K subsidy, 98.4 percent has been exhausted until October. The government has allocated ₹22,303 crore subsidy during the current Rabi season (October-March) for P and K fertilizers.
The requirement of urea in the current rabi season has been estimated at 185.41 lakh tonnes (lt), that of DAP at 54.99 lt, MoP at 12.60 lt, complex at 63.60 lt and SSP at 31.24 lt. However, as sales of fertilizers in October increased by 9 percent, there is an apprehension that overall fertilizer usage will also be higher this season than last year.
Sales surge
According to official data, overall sales of four key groups of fertilizers — urea, DAP, MOP, and complex (a combination of N, P, K, and S nutrients) — have surged to 368.57 lt during April-October 2023 from 327.28 lt year-ago, up by 12.6 percent.
The cumulative availability (including carryover stock from kharif season) in the current rabi season (October-March) as of October 30 was 78.07 lt of urea, 30.24 lt DAP, 6.83 lt MoP, 42.33 lt complex and 19.85 lt of single super phosphate (SSP).
In 2022-23, the country’s fertilizer subsidy reached a record ₹2.25-lakh crore after a global price surge. Prices have fallen from those highs. Imported urea has fallen to about $360/tonne (FOB) from about $665 in October 2022, that of DAP to $595/tonne (CFR) from $722 a year-ago and MoP to $319/tonne from $590 a year-ago.
