The ruling United Business Group (UBG) of FPCCI on Wednesday demanded cut in the price of locally produced urea to boost agricultural production as high price is beyond the capacity of poor farmers. The difference in price of 50kg per bag of locally produced and imported urea is Rs 200 which should be rationalised in the interest of agriculture sector which is backbone of the economy otherwise it will cast negative shadow on troubled agricultural sector, it said.
In a statement issued, Chairman UBG Iftikhar Ali Malik said that producers must reduce profit margin to benefit growers. The Government can also think about revising sales tax and Gas Infrastructure Development Cess (GIDC) to make locally produced fertilizer cheaper.
Prices of gas have been revised upward while GIDC on feedstock is being charged at the rate of Rs 300 per MMBTU which was Rs 197 in 2011 causing increased cost of production, he added. The veteran business leader demanded that the claim of manufacturers that average gas price in Pakistan for the fertilizer sector is almost double of what is offered in the Middle East must be measured.
In a recent meeting of the National Assembly's Standing Committee on Industries and Production it was alleged that urea manufactures would earn up to Rs 30 billion in profits due to overcharging which must be probed. They said that manufacturers should demonstrate responsibility, government can consider rolling back GIDC and provide some relief to Urea industry otherwise cheap imported urea will flood the market very soon. Some traders have already initiated process of importing urea which warrants immediate action, he warned.