Goverment allows profit margin of up to 12% for manufacturers of potassium and potassic fertilisers
The Ministry of Chemicals and Fertilisers has said that the government has allowed a profit margin of up to 12 per cent for manufacturers of potassium and potassic fertilisers as part of guidelines issued to evaluate the reasonableness of maximum retail prices for these fertilisers.
In efforts to curb possible instances of companies making unreasonable profits from the sale of the fertilisers, the Ministry of Chemicals and Fertilisers came out with the guidelines with retrospective effect. The guidelines for evaluation of the reasonableness of maximum retail prices (MRPs) of P&K fertilisers under the Nutrient Based Subsidy (NBS) Policy was issued on January 18, 2024 but will be effective from April 1, 2023. GST will be excluded from the evaluation of the reasonableness of MRPs.
For importers of P&K fertilisers, including di-ammonium phosphate (DAP) and Muriate of Potash (MoP), the profit margin allowed is 8 per cent. It has permitted 10 per cent profit for manufacturers and 12 per cent for integrated manufacturers. Unreasonable profit earned by the company will have to be refunded, or else it will be recovered by the ministry or adjusted with the future subsidy payment, as per the guidelines. In case of urea, the government fixes MRP and pays the difference between the cost of production and retail prices as a subsidy to companies.
