Economic Coordination Committee (ECC) of the Cabinet has decided that the price differential between prices of imported urea and selling price of locally manufactured urea should, in no case, be more than Rs50 per 50-kg bag. ECC in its recent meeting was informed that the National Fertiliser Marketing Limited (NFML) was supplying imported urea at Rs1,300 per 50-kg bag, while the locally produced urea was available to the farmer at Rs1,700-1,750 per 50-kg bag and in this way the middleman was benefiting.
The meeting recalled ECC’s earlier decision where-under price differential between imported urea and the locally manufactured urea should not be more than Rs25 per 50-kg bag. It was suggested that in order to ensure benefit to the farmer, it was imperative that the aforesaid decision of the ECC should be strictly enforced. However, the price differential may be adequately enhanced. It was also observed that, transport charges and other incidentals are not included in the price mechanism to determine the cost effectiveness of the price differential.
ECC was informed that in pursuance of its decision of February 1, 2011, 23,497 tonnes of urea out of 70,000 tonnes reserved for the flood affectees of Sindh for Rabi 2010-11 was diverted to Punjab from Trading Corporation of Pakistan (TCP) stocks with an understanding that this quantity would be replenished on arrival of imported urea. At the time, price of urea charged by the NFML was Rs780 per 50-kg bag, which later increased to Rs1,300 per bag. It was revealed that the matter was taken up with government of Punjab for return of the same quantity of urea to Sindh, but that the Punjab had not agreed. However, on the directions of senior minister for industries, 5,068.75 tonnes of urea costing Rs131.78 billion had been supplied to the government of Sindh, leaving a balance of 18,428.55 tonnes, cost of which at the prevailing rate of Rs1,300 per 50-kg bag comes to Rs479.14 million.
Ministry of industries proposed that this amount may be reimbursed by the finance division. During discussion, it was observed that transfer of urea to Punjab was a good gesture of the government of Sindh and it needed to be reciprocated. It was also observed that ECC’s decision relied upon by ministry of industries did not mention the transfer of urea to Punjab or the risk recovery. Thus, government of Punjab could not be forced to return the urea. However, ECC suggested that the matter may again be taken up with government of Punjab for an amicable solution. It decided that secretaries finance and industries division should jointly have a meeting with Punjab chief secretary, and if needed, with the chief minister Punjab also, to persuade the later to reciprocate the good gesture of the government of Sindh.
