Fertilizer Manufacturers Pakistan Advisory Council (FMPAC) has pleaded before to caretaker Prime Minister (PM) Hazar Khan Khoso and Ministry of Petroleum and Natural Resources to resolve the crisis being faced by fertilizer industry due to continuous gas shortage.
FMPAC Executive Director Shahab Khawaja while appreciating the alternative long term solution for four Sui Northern Gas Pipelines Limited (SNGPL) based fertilizer plants said that the consortium of these four plants was engaged in hectic activities after the approval of long term arrangement was conveyed to them by the ministry concerned but even with fast track efforts, the long-term arrangement would not be completed before March 2014. Hence, the next 12 months would be crucial for fertilizer industry, he added. He pleaded before the caretaker PM to instruct the SNGPL for full and immediate resumption of gas to the most deprived fertilizer plants.
He further said that the industry in general and the four plants located on SNGPL and FFBL plant on SSGC network in particular, have been the worst hit plants in 2012 and still, only Agritech and DH Fertilizers have managed to start production in March 2013. It was critical that gas supply be resumed to all the plants on urgent and permanent basis for them to remain viable in the long run. He said that losses would be irreparable if the current gas crisis continued, as SNGPL supported plants may have to shut down production permanently, thus causing huge financial losses to these companies. Besides, the businesses would become bank defaulters which would render highly trained and specialised manpower jobless.
Furthermore, he said that the current situation of Pakistan’s foreign reserves was not allowing the country to drain hundreds of millions of dollars on importing urea, while adding that instead the country could export extra urea after meeting the domestic requirements to earn the foreign reserves for country. He said that the government should realise that a commodity in which the country was self sufficient should not be imported from other countries.
Moreover, he said that the fertilizer sector was facing undue discrimination in the country. In the recently revised gas allocation priority, the fertilizer industry was placed on the third spot in rankings, behind domestic and power sectors, he said. Yet, industries in general continued to receive gas while the fertilizer industry was deprived of this basic raw material for producing the much required urea for the agriculture sector. Even CNG sector, which was last on the priority list, was receiving gas.
On an average, general industry received 50% gas on full load basis while fertilizer sector received less than 20% gas on 75% load basis. Shahab strongly urged the ministry to take notice of this discriminatory treatment being faced by fertilizer industry.
He said that apart from SNGPL network based plants, SSGC based FFBL also remained shut down for 30 days in January and February alone due to complete closure of gas by SSGC. He said that on average FFBL faced 50% gas curtailment in the first 60 days of this year. It is pertinent to mention here that the SSGC was observing CNG holiday for its network for one day only.
FMPAC executive director urged the ministry to direct the SNGPL to restore gas supply to fertilizer plants on immediate basis. He said that long term solution for SNGPL based fertilizer plants would only be a viable option if these four plants survived until March 2014. He also urged the ministry to direct the SSGC to restore a continuous gas supply to FFBL, which had been continuously facing adverse situation due to non-supply of the required amount of gas. Shahab extended full cooperation to the ministry for solving the critical issue of gas crisis in the country, which was badly affecting the fertilizer sector and resulting in increased prices of urea in the country.
