The government has decided to hike the maximum retail price (MRP) of urea from Rs.4,830 to Rs.5,310 of a tonne with effect from April1,2010. As part of the move to usher in a Nutrient Based regime in the coming fiscal, the government ,has decided to free all non-urea fertilizers from MRP controls. At present the MRPs of 19 fertilisers are fixed by the Centre .This decision would mean  technically that  the companies would  be allowed to have the freedom to set farm gate prices in 18 out of the 19 fertilisers ,with urea continuing to be subjected to MRP controls .However the official release issued after the Cabinet’s meeting also mentioned that the fertilizer industry had assured that in all the decontrolled fertilizers , “the price line around the current level would be maintained during kharif 2010.”

The NBS System would replace the existing ‘product based subsidy’ regime  which would entail linking subsidy not to specific products like DAP and MoP, but to the nutrient content of fertilizers sold in whichever form. The NBS would cover 13 soil nutrients. Initially, the subsidy will be granted on a flat per tonne basis only on the ‘N’,’P’,’K’ and ‘S’ content of any fertilizer during 2010-11.These would be benchmarked to the import parity prices (IPP) of urea, DAP, MoP and sulphur.