Fertiliser plants: Gas companies directed to ensure uninterrupted gas supply

ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin has directed gas companies (the SSGCL and the SNGPL) to ensure uninterrupted gas supply to the fertiliser plants to increase domestic production of urea for Rabi season 2021-22 as import of urea was not feasible owing to its high prices in the global market.

Tarin chaired a meeting on fertiliser and to review whether his decision taken in the meeting of the Economic Coordination Committee (ECC) of the Cabinet on October 10, 2021 for allocation of 58MMcfd gas to Pak-Arab and 63 MMcfd to (Fauji Fertilizer Bin Qasim Limited (FFBQL) for ensuring estimated demand for urea fertilizer is met through domestic production.

An official said that increase in domestic production of urea was very important as import of the commodity may not be affordable due to high price of urea in the international market and on top of that serious impact on import on foreign exchange reserves.

He said that imported urea would also increase input cost of the fertiliser sector.

As a result, he said that cost of domestic production would increase at a time when the inflation is already on rise.

He further stated that uninterrupted gas supply to fertiliser plants will be made through gas management.

Sources on condition of anonymity said that the total off-take of urea is estimated at 3.198 million tons for Rabi season with shortage of around 300,000 metric tons, which would be available from the operation of LNG-based fertiliser plants by 31st January 2022 (in winter months).

He added that the recent meeting of the National Price Monitoring Committee was informed that the off-take of DAP is expected to reduce by 10 percent due to price escalation.

A hand out issued by the Finance Ministry, after the meeting on fertilizer, stated that secretary, Ministry of Industries and Production briefed the meeting about the demand and supply situation of fertiliser in the country.

Supply of gas to the SNGPL-based urea plants will assure production of additional 300,000 metric tons till January 2022.

The government, he added, is firmly committed to ensure maximum gas supply to all fertiliser units including Pak-Arab and Fauji Fertilizer Bin Qasim Limited (FFBQL) besides, the meeting was told that the tender for import of 100,000 metric tons of urea has also been advertised.

The adviser on finance expressed satisfaction on urea availability and directed the gas companies to streamline supply of gas to the fertiliser units for smooth production of fertiliser.

Copyright Business Recorder, 2021