KARACHI: Engro Fertilizers, a leading agricultural support company, has taken decisive steps to ensure the enforcement of urea pricing guidelines in line with the Government’s directives. The move aims to guarantee the availability of urea to farmers at officially sanctioned prices.
In a series of dealer conferences held in Lahore, Multan, and Hyderabad, Engro Fertilizers emphasized the importance of adherence to the Maximum Retail Price (MRP) for urea sales. Atif Muhammad Ali, the Vice President of Marketing at Engro Fertilizers, addressed the attendees, stating, “Engro Fertilizers is committed to maintaining the highest standards of integrity and expects the same from its dealers. It is imperative for the prosperity of our farmers that urea is made available at the official prices.”
The conferences also served as a platform to inform dealers about the recent surge in gas prices and the resulting disparities among fertilizer manufacturers. The feedstock gas prices for manufacturers on the SNGPL and SSGC networks, which account for 60% of the total production capacity, have risen from PKR 580/mmbtu to PKR 1,597/mmbtu. Conversely, manufacturers on the Mari network, responsible for the remaining 40% of production, continue to benefit from the subsidized rate of PKR 580/mmbtu.
This uneven gas tariff has led to market distortions, with varying urea prices based on the differing gas input costs for manufacturers. Such discrepancies have allowed intermediaries to potentially reap excessive profits estimated between PKR 80 to 100 billion.
Mr. Ghulam Ahmed, Patron in Chief of the All Pakistan Fertilizer Dealer Association, advocated on behalf of the dealers for a standardized gas price across all fertilizer manufacturers. He argued that this would establish a uniform urea price, curtail market speculation, and stabilize prices for the benefit of the nation.
The proposed equalization of gas prices among manufacturers could enable the government to stabilize urea prices for farmers and recover revenues of PKR 80 to 100 billion, which would otherwise line the pockets of middlemen. These funds could then be redirected by the provincial government towards direct fertilizer subsidies for farmers or invested in the advancement of modern farming techniques to enhance agricultural productivity.
Pakistan’s locally produced urea fertilizer sales decline 13% in February 2023