Chennai, Oct 11 (IANS): Tamil Nadu Chief Minister O.Panneerselvam Saturday urged the central government to continue subsidies to two naptha-based fertiliser plants so they can function till they get gas connectivity.

In a letter to Prime Minister Narendra Modi Saturday, the text of which was released to the media here, Panneerselvam urged Modi to direct the union chemicals and fertilisers ministry to allow functioning of the two plants by continuing the subsidies.

Fertilser plants of Madras Fertiliser Ltd (MFL) and Southern Petrochemicals Industries Corporation Ltd (SPIC) in Tuticorin closed their urea plants Oct 1 after the central government stopped subsidies.

Referring to the central government's decision to allot imported urea to Tamil Nadu this season, Panneerselvam said: "The measure to import one million tonnes of urea additionally this year will not achieve the objective of reducing subsidies by closure of naphtha based plants."

He said the state will also face a loss of revenue by way of value added tax (VAT) paid by SPIC and MFL to the extent of about Rs.220 crore per year.

The stoppage of production of these two plants will also have spillover effect on the state's economy, he added.

"I am informed that the cost differential between gas and naphtha would be practically nil, if the oil marketing companies could supply at export parity prices instead of charging the import parity prices along with their margin," Panneerselvam said.