KARACHI – The cost of agricultural inputs are surging as fertiliser producing companies have started to pass on the negative impact of, what they claim, repeated suspension of gas supply to their plants by the Sui Northern Gas Pipelines Limited (SNGPL). The Engro Fertilisers Limited (EFL), a subsidiary of Engro Corporation, has enhanced prices of its urea by Rs 60 per bag after one of its new urea fertiliser plants was rendered nonfunctional due to suspension of gas by the SNGPL.
“Engro Fertiliser has, however, increased price to cover losses caused by repeated suspension of its gas supply,” the company told its shareholders at Karachi, Lahore and Islamabad stock exchanges on Monday. The fertiliser firm is currently in negotiations with relevant authorities in the government, as well as in SNGPL, for immediate restoration of gas supplies to its new plant. The SNGPL suspended gas supply to all four urea plants at its network, including that of EFL, citing reduction in supplies from some of its fields and increased demand for gas due to cold weather in northern parts of the country.
“They (SNGPL) were claiming Force Majeure and temporarily suspending supply of gas to all four fertiliser plants on their network, including Engro Fertilisers new plant,” it quoted an SNGPL letter as saying. The company disagreed with the SNGPL’s claim that suspension was due to shortage or higher demand and said that reasons cited were not Force Majeure and under the Gas Sale and Purchase Agreement, the SNGPL was contractually bound to supply gas. “However gas supplies were suspended,” it said.
“We would like to clarify that supplies of gas from Mari Gas Company to the company’s old urea plant continue,” the EFL said. All companies listed at the country’s three bourses are bound to disseminate with stock exchanges and any information that is sensitive for prices of its shares under the Listing Regulation No 35(xxiii) of the Code of Corporate Governance.
