Indian fertiliser units can shift to gas, fresh equity for banks

February 11th, 2009 - 4:33 pm ICT by IANS  

New Delhi, Feb 11 (IANS) India’s cabinet Wednesday allowed the heavily regulated fertiliser industry to switch from naphtha and fuel oil to natural gas, a more efficient and cleaner feed stock, and decided to infuse Rs.38 billion (Rs.3,800 crore) into three state-run banks.Home Minister P. Chidambaram, who briefed reporters on the decisions taken by the cabinet, said United Commercial Bank, Central Bank and Vijaya Bank will get the capital in two instalments spread over the current and the next fiscal.

Among them, United Commercial will get Rs.12 billion, Central Bank Rs.14 billion and Vijaya Bank Rs.12 billion, he said after the cabinet meeting presided over by External Affairs Minister Pranab Mukherjee.

Regarding the fertiliser sector, the home minister acting as the spokesperson for the cabinet said companies that convert to gas from naphtha or fuel oil will be compensated for the switchover.

“The conversion of these units will lead to increase in efficiency and usage of natural gas which is the most efficient and cleaner feedstock for the production of urea in the country,” Chidambaram said.

The minister said the permission to convert to natural gas will also help those fertiliser units that were shut down because of the unavailability of naphtha or fuel oil. These units have to restart their plants by 2010.

India’s natural gas production is expected to go up significantly after Reliance Industries, controlled by Mukesh Ambani, starts pumping natural gas from the Krishna Godavari Basin, off the Andhra Pradesh coast.

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