Naphtha and natural gas as feedstock are considered building blocks by the entire petrochemical industry. As feedstock, Naphtha and natural gas are transformed into various industrial and consumer goods.
On the one hand, the cost of Naphtha fluctuates as a function of international oil prices and being a major feedstock, it is expensive. In 1999, it cost around Rs 12,040 per ton. On the other hand, natural gas is much cheaper than Naphtha for it costs US$ 4 per million BTU and its price does not vary as much as Naphtha's. The supply of natural gas is controlled by the Oil and Natural Gas Corporation (ONGC) and the Gas Authority ofIndia Ltd. (GAIL).
Natural gas and Naphtha as feedstock form important components for the formation of nitrogen based fertilizers such as urea. The subsidiaries on feedstock such as Naphtha and natural gas have been removed as a direct aftermath of de-regulations in the hydrocarbons industry. This has led to an increase in the cost of production of nitrogenous fertilizers.
Further, natural gas and Naphtha are feedstock for the power supply sector and this also increases the cost of both the items. As the unhindered and regular supply of Naphtha and natural gas as feedstock are quite critical, many companies maintain both the natural gas and Naphtha gas lines. This shows the importance of Naphtha and natural gas as feedstock.
Naphtha and natural gas as feedstock are important for they are the basic chemicals for the formation of many products. So efforts must be taken by the government ofIndia and the petrochemical industry that the supply of natural gas and Naphtha is well maintained
Last Updated on 13 December 2011