Fertiliser companies gain as Cabinet approves gas pooling

MUMBAI: Shares of fertilizer companies moved higher in trade and gained upto 16 per cent after the Union Cabinet approved pooling of imported and domestic gas to enhance production and lower costs.

The move will result in savings of over Rs 1500 crore in subsidy and benefit as many as 30 urea plants.

The government has announced a uniform gas pricing policy and pooling of domestic and imported natural gas for urea plants in India. Currently the average cost of gas is $20/mmbtu which is expected to come down to $11-12/mmbtu.

According to R G Rajan, CMD, Rashtriya Chemicals and Fertilizers (RCF) gas price pooling is positive for industry at large and lower gas price will cut operatingcost for phosphatic, potassium fertilisers.

He is of the view that fertiliser plants that were unviable earlier will be able to start operations. New plants will also get gas at pooled prices. The company expects 5-6 new plants to come up in next few years.

RCF rallied 6.12 per cent to touch intraday high of Rs 59.75.

Chambal Fertilisers surged as much as 6.22 per cent to touch intraday high of Rs 71.70.

Fertilisers & Chemicals Travancore touch intraday high of 16.01 per cent.

GNFC gained as much as 6.9 per cent to touch intraday high of Rs 72.50.