Minimising reliance on imports: meeting to evolve fertiliser production strategy today

An inter-ministerial panel, headed by the Minister for Industries and Production Hazar Khan Bijarani, will be meeting on Thursday for a brain storming session to firm up a national fertiliser strategy aimed at minimum reliance on imported fertilisers, official sources told Business Recorder.
Other members of the panel are Minister for Food and Agriculture (Minfa) NAzar Muhammad Gondal, Minister for Petroleum and Natural Resources Naveed Qamar and Minister for Water and Power Pervez Ashraf. Unconfirmed reports suggest that the committee, constituted by the Economic Coordination Committee (ECC) of the Cabinet, will accept the proposal of Fauji Fertiliser Bin Qasim regarding establishment of an integrated fertiliser complex (ammonia, urea and DAP), adjacent to the existing plant.
The panel will assess future additional production, demand and prices of fertilizer for both urea and DAP in both short and long terms and submit a report to the ECC. The government is already giving Rs 17 billion subsidy to the fertilizer sector despite stiff resistance by other sectors. Sources said that current feed gas subsidy is the most cost-effective way of passing the subsidy to the farmers.
According to a recent study, until 2025 Pakistan's population would grow by 1.9 percent and with an increasing income level, food consumption per capita will rise by 42 percent. At the same time, the available arable land area would drop by 25 percent per capita.
Based on these perspectives a potential undersupply with food in the future can only be avoided by consumption of fertiliser and an improved mix of fertilisers is mandatory, the study said. Pakistan is also facing gas shortage, and the government is exploring different options to inject imported gas into the existing transmission system.
The Cabinet had diverted 20 percent gas from fertiliser companies to the power sector to minimise the duration of electricity load shedding which was later on extended to October 31, 2010. Fertiliser sector not only protested against the decision of the Cabinet but also demanded billions of rupees compensation, which was denied by the Cabinet and the 'Energy Summit'.
The ECC, in one of its latest meeting, had criticised the Ministry of Industries and Production (MoI&P) and the Petroleum Ministry for siding with fertiliser sector over non-restoration of full gas supply to the fertiliser sector. The Energy Summit had decided to divert 20 percent gas earmarked for the fertiliser sector to the power plants till July 31, 2010. The Summit, in its second meeting, decided to continue implementation of the same measures announced in the first meeting.