Fertilizer industry Monday showed reluctance to reduce urea prices by Rs 128 per bag on the pretext that the middlemen are making profits and not the industry as is being portrayed by the government, well informed sources told Business Recorder. The fertilizer industry took this stance at a meeting in the Ministry of Industries and Production represented by all the fertilizer plants and different concerned Ministries.
One of the participants told this scribe that there was a consensus that there was no need to import urea as local production will be enough to fulfill domestic requirements. The government would continue to provide gas (RLNG and natural gas mix) to two fertilizer plants till January 2019 after which both plants will operate on RLNG.
Fertilizer industry argued that urea prices are still at the level of three years ago and whatever increase was witnessed was due to withdrawal of subsidy and hike in gas prices.
Prime Minister's Advisor on Commerce and Industries and Production and Investment will submit recommendations to the ECC on Tuesday (today).
The sources said both the government and domestic fertilizer industry are not on the same page with respect to resumption of subsidy on the same pattern as in the past. The industry argues that if the government wants to resume subsidy on urea, it should be disbursed directly to gas companies in lieu of price differential. This will restrict payment for gas increase to only old plants, as new ones with fixed gas price are not affected.
Official documents reveal that the ECC in its meeting held on November 7, 2018 had approved operationalisation of two fertilizer plants, ie, M/s Fatimafert and M/s Agritech for a further period of two months, ie, December 2018 and January 2019. And urged the Advisor to Prime Minister on commerce, Industries and Production and Investment to interact with the manufacturers to work out necessary modalities in this regard and make appropriate recommendations to the ECC.
The ECC had also allowed import of an additional 50,000 tons of urea by the Trading Corporation of Pakistan (TCP) to meet the shortage during Rabi season 2018-19. The Ministry of Industries and Production would keep the situation under constant review and import another 50,000 tons of urea through TCP, if so required.
The documents further disclose that the ECC took serious notice of the sale of urea at higher prices, which has increased the cost of production for the farming community. The ECC maintained that unjustified increase in the urea prices will not be tolerated on the pretext of increase in gas prices and advised Advisor to Prime Minister to hold meetings with the fertilizer manufacturers on the issue of higher prices of urea and submit a report with recommendations for reduction in its price. In this regard, a cost sharing formula may be considered, if necessary, to ensure that fertilizer is made available to farmers at affordable rates.
Comments
Comments are closed.