NFML imported stock: Dealer transfer price raised to Rs2,150 per bag

ISLAMABAD: The government has increased dealer transfer price (DTP) of the NFML imported stock to Rs2,150 per bag exclusive of dealers’ margin of Rs50 per bag) from July 26, 2022.

An official said that the ECC meeting presided over by Finance Minister Miftah Ismail was informed by the Ministry of Industries and Production that on February I4, 2022, the DTP for imported urea was fixed at Rs1,718 per bag (exclusive of dealer margin of Rs50/bag). Meanwhile, the retail prices of urea fertiliser have been increased to Rs1,950 per bag (inclusive of dealer margin of Rs145 per bag).

Since the price of imported urea was lower as compared to locally-produced price, the NFML has proposed that in order to remove the disparity between the prices of imported and locally-manufactured urea, the price of imported urea may be revised upward. In addition, the NFML in wake of recent inflation requested the revision of its expenditures incurred for holding the current stock of urea. Therefore, it is proposed that;(i) DTP of 50kg imported urea bag may be revised upward at Rs1,805 per bag by NEML (exclusive of dealer margin of Rs145 per bag) for the stock sold between 23rd June to 25th July 2022.

As proposed by the Finance, the DTP of remaining stock held with the NFML may further be revised upwards to Rs2,150 per bag exclusive of dealers’ margin of Rs50 per bag) from July 26th, 2022.

The ECC was also requested to increase incidental and other charges from Rs456 per bag to Rs538 per bag based on actual charges – transportation charges to Rs302 per bag from Rs289 stock handling, warehousing and labour charges Rs151 per bag from Rs92 and TWPP Rs75 per bag.

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The meeting was informed that the Finance Division has endorsed the proposal with the observation that the DTP for imported urea may be adjusted with the prevailing retail prices of urea which have recently increased. The dealer margin may be justified keeping in view the existing market conditions. Moreover, the MOI&P may also incorporate the financial implications – saving – due to the proposed revision of the DTP.

With reference to the proposal of incidental charges, the Finance Division has informed that the NFML is allowed to retain Rs456 per bag as per earlier approval of the ECC on a provisional basis.

However, the final determination of the incidental charges will be made by the Finance Division later on the basis of actual cost based on the submission of the audited financial accounts duly endorsed by the Ministry of Industries and Production.

The Commerce Division has informed that the determination of incidental charges of the NFML has to be finalized consultation with the Finance Division based on actual expenditure. Hence the matter does not relate to Commerce.

However, the Ministry of Industries and Production is requested to ensure that dues of the TCP on account of procurement of urea are paid to the TCP at the earliest, by arranging a supplementary grant from the Finance Division.

With reference to the comments from the Finance Division, it is put forth before the ECC that while the summary was under circulation to Finance and Commerce from June 28, 2022, retail prices of urea were revised by manufacturers from the previous DTP of Rs1,805/bag to Rs2,150/bag.

The meeting was informed that during the course of time, the NFML had booked imported urea at Rs1,805/bag and shipped a total of 83.294 6 MT, leaving a balance of approximately 16,904.2MT with the NFML till July 25th,2022.

Upon receipt of comments from the Finance Division, the NFML was directed to book the remaining stock at a revised DTP of Rs2,150/bag (exclusive of dealer margin of PICR50/bag). The increase in price would result in an increased recovery of Rs116.64 million on the remaining stock held with the NFML.

Copyright Business Recorder, 2022