The fertilizer industry has voluntarily held back the impact of recent gas price increase to prevent backlash of it to farmers. This was agreed on request of Advisor Industries, Razzaq Dawood. The Advisor has assured the industry about settlement of GIDC effective 01 July to mitigate the loss to industry due to increased cost of production. The industry is optimistic regarding the GIDC settlement as agreed by Asad Umar in January this year to reduce the rates by 50% since inception and prospectively as well.
The fertilizer industry has already paid Rs 127 Billion on account of GIDC up to 2015, unlike other sectors withholding the bulk of GIDC payment. The industry expected settlement of outstanding Rs 20 Billion on account of subsidy as well as GST refund to the tune of 24 Billions in the process.
The industry expected redressal of cash flow challenge through GIDC settlement. The fertilizer industry has shown its full confidence in the leadership of Razzaq Dawood, who fully appreciated the contribution of industry to national economy and food security and expressed his appreciation for the gesture, said Fertilizer Manufacturers Advisory Council of Pakistan (FMPAC).
The industry has been making major contribution towards the national exchequer. Last year the fertilizer industry contributed in the economic growth of the country being one of the highest tax-payers. It paid Rs 45 billion in taxes which are virtually equal to the net profit the industry had earned. The industry has passed on Rs 527 Billion benefit to the farmers in terms of lower prices against gas subsidy of Rs 127 Billion during past 9 years. Furthermore, the industry has been offering its extensive support in uplifting the masses through different CSR related projects.
Understanding the Government's current situation witnessing protests against economic measures that it can't afford to open another front, the fertilizer industry has decided to give its maximum support to the government on the prevalent price issue.
The rise in Feed Gas (62%) and in Fuel Gas (31%) prices which, as a result, impacted the cost of production by Rs 210 per bag. However, the industry has decided to increase the price by only token of Rs 10 per bag, in anticipation of GIDC settlement. The industry expected the Government to help it by providing sustained supply of gas at affordable prices to enable it play a significant role in the development of the economy and national food security.
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