The profit minting fertiliser industry successfully pressurised the feudal elite to force the government to abstain from increasing gas tariff for their feed stock as well as fuel supplies as otherwise they
warned the prices of urea would double and there would be severe political back lash for the ruling PPP from the rural areas.
An official source said that a day before the increase in gas prices, the fertiliser industry high ups gave a briefing to the government on the negative impact of the increase in gas prices. They said that the urea prices have increased from Rs800 per bag to Rs1550 per bag over the last 18 months and if the gas tariff was increased the fertiliser prices would enhance by Rs750 per bag in the next two weeks. The meeting was informed that the fertiliser sector was already operating on rotational basis and they had no stocks. If the tariff was increased, their prices would significantly increase and the hoarders might try to cash in on the situation during the coming Rabi season. After consideration at the top level it was decided that the gas tariff for fertiliser sector would not be increased as it would directly hit the rural economy and farmers.
The source said that the fertiliser sector successfully duped the feudal elite as nobody told them that each 50 kg bag of fertiliser is produced utilising only 6 per cent of gas. The companies are highly profitable that is why they were expanding to power, food and LNG imports. The fertiliser sector even managed to silence the Finance Ministry with the argument that the landed cost of imported urea would be Rs2950 per bag and the government would have to bear a massive subsidy of over Rs100 billion. Since the political leadership and finance mandarins were silenced the Petroleum Ministry was asked to cull the domestic consumers, commercial and CNG sectors. Pakistan’s total urea demand is assessed at 6.3 million tonnes per annum, the domestic production capacity also hovers around the same limit. But due to gas shortages this year the production is estimated to decline. This decline in production might have a negative impact on the farmers who will have to bear the brunt of higher urea prices.