Being engaged with the Agricultural sector and fertilizer industry of Pakistan, it was heartening for me to note that in April 2016, the Oil & Gas Regulatory Authority (OGRA) has finally reduced the price of Feed-Gas, used in the Fertilizer producers. The Gas prices for the fertilizer industry have now been reduced from Rs. 200 per MMBTU, down to Rs. 123 per MMBTU.
The fertilizer manufacturers have thanked the government for this supportive gesture of reducing Gas price, and have passed on its robust benefits to the farmer community. Therefore, the Urea prices have already been slashed by Rs.60 per bag. A Urea bag now costs Rs. 1790, down from the previous Rs 1850. This shows that the Fertilizer industry is deeply committed to nurture stronger agricultural productivity in the country. Experts state that the Urea prices are likely to be further reduced over the coming weeks, as the country does have enough stocks of Urea. This way, the farmers can take maximum advantage of cheaper urea off-take, during the cultivation of various major crops like; cotton, rice and sugarcane, over the forthcoming season.
As the fertilizer producers, Government and farmers stand as partners to improve the crop yields in the country, through progressive farming, advisory services and research, the experts foresee a sharp rise in the demand for urea, expecting the prices to come further down. The industry’s total production figures currently stood at 5.5 million tons while the demand hovers between 5.1 to 5.4 million tons. Industry officials are hopeful that the rising fertilizer production, with sufficient gas supplies, is likely to push manufacturers to seek government’s permission for exports.
Over the years, Pakistan’s fertilizer industry had also been subjected to a heavy rate for feedstock gas, along with the imposition of the ‘Gas Infrastructure Development Cess’ (GIDC), making it difficult to compete with imported Urea. The industry had long been demanding a downward revision in GIDC, especially in the wake of rapidly falling international Urea Prices.
So now we can hope for a brighter, greener future of Pakistan.
Ammar Muzaffar
Karachi