ECC urea import decision entails big subsidy

11 Sep, 2018

The Econ-omic Coordination Committee (ECC) of the Cabinet has decided to import 100,000 tons of urea and provide Rs 960 per bag subsidy; however, the decision regarding increase in gas price was put off for the second consecutive meeting.
An official said that sufficient stock of urea is available in the country for Kharif season and the decision has been taken to import urea for Rabi season to ensure adequate urea in the country for discouragement of those who want to make windfall profit by increasing its price at the cost of poor farmers.
The government will provide the subsidy involved and ensure that adequate urea is available to farmers at last year''s price of Rs 1615 per bag.
Meanwhile, sources said the two fertilizer plants, Fatima Fertilizer and Agritech having monthly production of 37,125 tons and 36,094 tons, respectively, will also become operational and 150,000 tons production is anticipated during the two months with a monthly production of 79,000 tons. Sources said the procedure to import urea will be initiated in the next few days.
Later on in a recorded briefing about the ECC meeting, Minister for Information Fawad Chaudhry said the decision has been taken to import 100,000 tons of urea fertilizer for the Rabi season.
The minister said that the government will provide a subsidy of Rs 960 per bag on imported urea to offset the cost differential between local and imported urea. The retail price of urea is Rs 1615 bag in Pakistan and imported urea would cost Rs 2,575 per bag. Though there are fiscal constraints, the government has decided not to burden the farmers.
Chaudhry said that the meeting also discussed in detail the matter of gas price and blamed the policies of previous government - Pakistan Muslim League (N) - of turning profitable gas companies into deficit of Rs 156 billion. He maintained that in 2013, Sui Northern Gas Pipeline Limited and Sui Southern Gas Pipeline Limited were not in loss; however, during the previous five years, total losses of SSGPL and SNGPL have gone up to Rs 156 billion mainly due to increase in gas theft. He wanted the former finance minister and prime ministers to explain about the losses.
He said that only 40 percent population is using natural gas facility and remaining 60 percent is using LPG cylinders, adding the incumbent government is very sensitive about the recent increase in the price of liquefied petroleum gas (LPG) and has directed the provincial government to initiate a crackdown on ''LPG mafia''.
He said the government is working to formulate a comprehensive system to minimize burden on the poor by providing maximum relief to them. The matter of subsidies would also be presented to the Prime Minister to make them targeted to the poor. The meeting, he said, also decided that special protection will be provided to the export industry so as to increase the growth of exports.

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