The quagmire of the energy crisis continues to slowly damage the economy as decline in gas supplies is estimated to result in a record urea shortage of 1.2 million tonnes for the upcoming Rabi season, badly affecting the wheat cultivation.
An official source said the urea shortage was expected to reach record proportions at the time of sowing, which could decrease wheat production and cause food security concerns for the country. The urea off-take is expected to be more than 3 million tonnes during the next Rabi season. The fertiliser companies have low stock as they have faced an unprecedented gas shortage during this current calendar year. On an average fertiliser companies are receiving two-day gas supplies per week during this year.
The government has approved the import of 600,000 tonnes of urea and is considering the import of another 500,000 tonnes. In total, the public sector imports would be 1.1 million tonnes. However, the official circles fear that the mismanagement in the public sector procurement process may result in a food security risk.
The source said the energy security was slowly getting out of the government’s control as there was a complete lack of coordination among various federal ministries, provincial governments, private sector and farmers. The government had failed to decide on the priority policy which was required for allocation of gas supply to different sectors, he said and added Pakistan had annual urea requirements of 6.5 million tonnes whereas its’ fertiliser industry had capacity to produce 6.7 million tonnes provided they receive regular gas supplies.
The Industries Ministry had requested the prime minister to allow fertiliser sector gas supplies to meet the country’s urea requirements, but the Petroleum Ministry opposed it on the grounds that they had no gas. The middle way could be found by curtailing gas supply to some other sectors for a few days. The government has, however, opted for the import of urea that will cost Rs 3,000 per bag while locally produced urea’s price is Rs 1,400 per bag, but is actually available at more than Rs 2,000 per bag. The government would have to give a subsidy of Rs 1,000 per bag.
