Fertiliser produced through CNG: Ministries take divergent positions on proposal

Ministry of Planning, Development and Reforms has opposed the proposal of Ministry of Industries with respect to export of surplus Calcium Ammonium Nitrate (CAN) and Calcium Nitrate (CN) fertiliser produced by using imported LNG, it was learnt. Sources said that Ministry of Industries had sought permission to export surplus quantity of Calcium Ammonium Nitrate (CAN) and Calcium Nitrate (CN) fertiliser.
The Ministry of Planning and Development recommended that CAN fertiliser should he promoted as a substitute of urea particularly for cotton crop and rain-fed areas through agricultural extension services. The use of CAN fertiliser will help decrease our urea import burden. They added that natural gas is being provided on a subsidised rate of Rs 200 per MMBTU to Pak Arab (commissioned in 1962) and Rs 71 per MMBTU to Fatima Group (installed in 2010) for feedstock arid Rs 600 per MMBTU as fuel for both urea and CAN, according to National Fertiliser Development Center (NDFC) of Ministry of Planning and Development.
The manufacturing of CAN by Fatima Fertilisers involves an estimated subsidised feedstock amounting to Rs 5660 per tonne. Annual production capacity of both plants is 680 thousand tones (340 thousand tones each) as per NFDC's data base. Subsidy per bag of CAN is approximately Rs 283 while total subsidy amounts to Rs 3.2 billion per annum (estimated).
Ministry of Planning and Development stated that urea is the main nitrogenous fertiliser followed by CAN and about 15 to 20 percent of urea demand is being met through imports which cost US $263 million in the year 2014-15 as against US $501 million during the same period in 2013-14. Energy crises in the country forced the government to adopt gas curtailment policy (since May 2010) which decreased domestic production of nitrogenous fertilisers by 20 per cent of their installed capacity. This scenario simultaneously shifts the state from urea rich to urea deficient country.
The ministry also gave a reference of the ECC meeting dated March 2015 in which it was decided to allow operation of the fertiliser plants on imported LNG with GST rebate of 12 percent (@ 5 percent for LNG plants as against 17 percent for SNGPL, Marl Gas or SSGPL plants). Pak-Arab CAN plant remained closed during most part of the year because of gas shortage but a drastic increase in buffer stock of CAN due to production shift from natural gas to LNG was noticed during recent months which resulted in piling up stocks to 271 thousand tones on 31st December 2015. This inventory is insufficient to justify its export permission that will pave way for export of other fertilisers and thus harming our agrarian economy.
The Ministry of Industries was told that export of fertilisers has been restricted by ECC of the Cabinet since 2004 (vide case No ECC-149/12/2004: dated: 09-12-2004), Export of CAN in international market has been discussed in defence/ security related national and international forums due to its multipurpose applications/ Concerns especially its use as Improvised Explosive Devices (IED). International media has criticised the aforesaid manufacturing groups, ie, Pak Arab and Fatima Group for CAN production in hostile region which borders war-torn neighbouring Afghanistan. The issue of CAN use as improvised explosive device has also been discussed at high level in Pakistan as well. The CAN and CN export may provide an excuse for propaganda against the country. International agencies / institution arid USA have shown their concerns many times in the past, the ministry further stated.
The NTDC of Ministry of Planning and Development recommended that export of CAN and CN in international market should be discouraged in the national interest as it will pave way for export of other fertilisers, provide excuse for international propaganda that may harm our repute at international level. The Ministry also proposed that CAN fertiliser should he promoted as a substitute of urea particularly for cotton crop and rain-fed areas through agricultural extension services.
Ministry of Foreign Affairs as well as other concerned stakeholders such as military establishment must be taken on board before taking any decision on the matter for harnessing security-related consequences. Moreover, the Ministry also recommended that financial benefits are important but security of the country could not be compromised on the cost of material gains.