Another meeting on reduction in urea prices presided over by Prime Minister's Adviser on Commerce, Industries and Production and Investment, Abdul Razak Dawood remained inconclusive, well-informed sources told Business Recorder.
The meeting was attended by Minister for Planning, Development and Special Initiatives Asad Umer, Federal Minister of National Food Security and Research, Khusro Bakhtiar, and Special Assistant to the Prime Minister on Petroleum, Nadeem Babar. Senior management of the fertilizer sector companies were also in attendance to present their stance.
The meeting focused on urea availability and pricing in the country with special focus over the recent gas price increase recommendation by the Ogra and its impact on urea's cost of production.
The industry representatives updated the committee over the high urea inventory build-up and current market pricing. They also mentioned that Ogra gas price increase recommendation, if approved, will have a direct impact on the cost of production of urea and therefore translate into increased sale price to farmers.
The government acknowledged this update but firmed up its continuing stance that this gas price increase is necessary as continuing subsidies through relief in gas prices are not sustainable. These subsidies have to be borne by the government and therefore are ever-present losses to the government earnings. It was also explained that this increase is premised on the additional revenue requirements of the two gas companies namely SSGCL and SNGPL.
Multiple facets of this argument were presented but no conclusion was reached on the gas price increase and the related urea price. The meeting was adjourned with an agreement that a similar sitting will be scheduled in the upcoming weeks for closure of the subject matter.
The committee has to submit its recommendations to Prime Minister Imran Khan.
Unconfirmed reports suggest that Razak Dawood-led committee will submit its recommendation to the federal cabinet on Tuesday (today). However, there was no official confirmation in this regard.
Copyright Business Recorder, 2019
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