The central government has delayed plans to increase the retail prices of urea by 10 per cent in the country during the 2012-13 fiscal year.

A proposal from the Fertiliser had suggested increasing the price of urea by 10 per cent to Rs 5,841 per tone for the fiscal year. Some officials close to the matter said that the Cabinet Committee of Economic Affairs (CCEA) has delayed its decision to implement the planed hike in price of urea.

Government fully controls the price of urea and it is now at about Rs 5,310 per tonne. The proposed hike is aimed at addressing the issue of imbalanced use of soil nutrient and reducing the subsidy burden for the government. The government pays the difference between the cost of production and the maximum retail price.

Urea accounted for Rs 24,500 crore in the fertiliser subsidy bill of the government. The Fertiliser Ministry is aiming to introduce changes to the New Pricing Scheme (NPS) Stage-III. It is not proposing to de-control the pricing as the move is being opposed by several sections in the country.

A report by the Planning Commission Member Mr Saumitra Chaudhary committee had suggested de-controlling the sector. The government had planned to bring it under the nutrient based subsidy (NBS) scheme. However, the move was opposed by many including the Fertiliser Ministry which cited the examples of phosphatic (P) and potassic (K) fertilizer prices after they were decontrolled in April 2010.

Estimates show that the country sonsumes around 28 mt, out of this about 22 mt is produced withint he country and the remaining in imported from other countries.