Rather than import parity price (IMPP); the Gas Price Pooling Policy seems to be a better deal for Urea Manufacturers. Do you agree with this view? Discuss.

Hint: Yes. I agree with this view. The Gas Price Pooling seeks to change the industry dynamics in Urea sector by leveling gas costs for all players.  Earlier, the situation was that every plant needed make its own arrangement / contracts individually on varied costs from different suppliers.
This situation was particularly disadvantageous for the plants which had no access to cheap domestic gas. By pooling domestic gas with imported gas, the delivered gas cost for all units will be uniform for all players who are connected to the natural gas grid.

Question for UPSC Mains:
Rather than import parity price (IMPP); the Gas Price Pooling Policy seems to be a better deal for Urea Manufacturers. Do you agree with this view? Discuss.

Published: October 28, 2015 | Modified:June 27, 2019

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