E-Paper
Naptha price hike hits Duncan?s restart
THE INCREASED cost of Naphtha is proving to be a major hurdle in the resumption of production at the Panki-based fertilizer plant of Duncan Industries Limited (DIL).
THE INCREASED cost of Naphtha is proving to be a major hurdle in the resumption of production at the Panki-based fertilizer plant of Duncan Industries Limited (DIL).
The Fertilizer Industry Coordinator Committee (FICC) recently fixed the price of Chand Chap urea at Rs 16,328 (plus sales tax) per ton. It was expected that after the announcement of the new price, DIL would resume operations. But the manifold increase in Naptha price derailed the plant’s move to start production.
According to sources, Naphtha price has risen by almost 2.5 per cent in the international market. Earlier, DIL’s monthly expenditure on Naptha was Rs 35-36 crore. But with the rise, the cost has escalated to Rs 84 crore per month. The immediate fallout of the hike is the requirement of more working capital for DIL.
Now, subsidies from the State Government and loan from financial institutions have to be restructured according to the present requirement of funds for DIL.
The Indian Oil Corporation (IOC) supplies Naphtha to Duncan Industries Limited, but after the hike the Duncan management is striving to get the price revised once again.
A senior Duncan official informed that even after restructuring of subsidy financial crisis of DIL persists.
“After submission of monthly bill to the Fertilizer Industry Coordinator Committee (FICC) for the payment of subsidy amount, it takes at least 45 days for the payment to be cleared,” the official said.
Therefore, at least for the period of 45 days extra working capital would be required which the company had not been able to manage till date, he added.
The DIL management is also accused of improper planning. A section of DIL employees are of the opinion that before resuming production, the management did not take into account the ground realities and failed to foresee the problems that have cropped up now.
Lay-off at the plant was lifted on July 8 last after continuous struggle by DIL staff and support of the State Government. On August 30 last, production of Chand Chap urea once again resumed at the Panki plant.
But barely after two-and-a-half months, the production once again came to a standstill due to financial crisis.
Apart from this, a minimum payment of Rs 3.75 crore per month is being made to the Kesco towards power dues. The payment is still being made despite the plant remaining non-operational.
The financial crisis of DIL can also be gauged from the fact that two months’ salary — December and January — of employees is still pending.
CITU secretary and senior leader of DIL Employees’ Union Arvind Kumar said, “When dues of Kesco are being cleared then why employees fail to get their salary.”
“I have raised the salary issue with the management and they had assured to clear the salary soon,” Kumar said.
Kumar said that employees were optimistic that production at Duncan Industries Limited would start soon.
