How has RCF been affected by the Governments new pricing policy for urea?
RCF’s Trombay plant is not operational ever since the retention pricing formula came into force. The Government has taken the weighted average price payable to different groups of companies (depending on the vintage of their plants). The Government compensates companies the difference between this price and the company’s average production cost, whichever is less. Suppose the weighted average price of a group is Rs 5,300 per tonne and if some company’s cost is less than that, it will receive the lesser price. In RCF’s case, at Trombay it is Rs 6,800 per tonne. But our cost is higher. So we incur a loss of Rs 800 per tonne. The problem is gas, the main feedstock, is not available. In the case of Thal, our cost is about Rs 200 less than the group’s fixed weighted average price. We are requesting the Government to at least compensate the decided price. What is RCF’s per tonne margin on urea? RCF earns roughly Rs 800 per tonne. Our cost of production is Rs 7,000 per tonne, while freight an
