Fertiliser companies have warned the government if natural gas supply to manufacturing units is not restored immediately, the country will not have enough fertiliser to meet rabi season requirements. Urea shortage will adversely affect crops yield that could push Pakistan in a severe food crisis.
Representatives of all fertiliser companies, including Fauji, Engro, Pak Arab, Agritech, Dawood Hercules and Fatima Fertiliser, held a joint press conference here on Monday. Fertiliser manufacturers pointed out that the Sui Northern Gas Pipelines Limited (SNGPL) had suddenly refused gas supply to fertiliser units, which was not only a violation of the agreement but also resulted in complete stoppage of Agritech, Dawood Hercules and Engro Fertiliser plants.
They indicated that the country had to spend around $720 million, if it went for urea import to overcome the imminent crisis. In addition, the government had to bear the cost of Rs34 billion subsidy to make urea affordable for farmers, as local producers were supplying the same commodity at 50 per cent price in comparison to the international prices, they maintained.
They said that fertiliser plants, including Pak Arab, Dawood Hercules, Agritech and Engro, connected on the SNGPL network were receiving 70-80 per cent gas supply against their allocated quota since September 5, which brought stability in urea price and supply in the country. But the sudden curtailment had once again derailed the stability in urea supply that would ultimately promote black-marketing of fertilisers.
Fertiliser manufacturers estimated that if the present situation persists urea prices could jump up to Rs3,000 per bag that would dramatically reduce its usage and rabi crop yields. Speaking at the news conference, Agri Tech CEO Bilal Jaudat said the government should realise the graveness of issue as Pakistan was an agriculture country. He termed fertiliser crisis ‘urea tsunami’ that was heading fast towards Pakistan and asked the government to ensure uninterrupted natural gas supply to prevent a major disaster. Engro Fertiliser CEO Khalid S Subhani pointed out that the fertiliser industry had been receiving gas supply for three days a week during the first half of the year, which was the lowest given to any sector. Despite the fact that the agriculture was the mainstay of the economy and urea was an essential agriculture input, it was beyond imagination why the government was inviting crisis. He indicated that the government ensured uninterrupted gas supply in August and September that helped in increasing fertiliser supply and dropped urea prices from Rs1,800 to Rs1,500 per bag. He also underlined that urea prices be brought back to Rs1,100 per bag even after adding the General Sales Tax (GST) provided the government ensured promised gas supply to the industry. Current estimates suggest, fertiliser manufacturers highlighted, that the country would have a urea shortage of around 0.7 to 0.8 million tonnes. If the government did not import fertiliser in the next couple of months, the country would have to face a serious food shortage crisis, they underscored.
Former SNGPL Managing Director and Dawood Hercules CEO Rasheed Lone said that the industry recognised gas shortage in the country, but there was a need to develop an equitable and fair gas distribution strategy for all sectors. He estimated that the country would lose Rs22 billion if wheat production dropped merely a maund per acre.
He asked the government to implement Natural Gas Allocation Policy 2005 in true spirit, which gave priority to fertiliser manufacturers after domestic and commercial consumers. The SNGPL should shift commercial consumers to liquefied natural gas (LPG) by offering them LPG in cylinders, he suggested. Responding to a question, he tried to dispel the impression that he was responsible for the gas crisis in country and undue delay in the Iran-Pakistan gas pipeline. He said that SNGPL was a government organisation and he it is run according to the government policy. The SNGPL had no pipeline expert that delayed the gas pipeline project, he underlined.
Mr. Rasheed lone talks Bull Shit. He himself is responsible for the shortfall of gas. He and his most corrupt associates were involved in taking heavy bribes for supply of gas to CNG sector. That was the main root cause for shortage of gas. He looted the company, earned Haram and brought the company at the verge of its collapse and crippled its corporate structure. He was the CEO of corrupt mafia of SNGPL. God bless Dawood Herculees for hiring the services of most corrupt person.
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