After giving an unprecedented benefit of Rs 30 billion to the local urea manufacturers, the government has allowed the state-owned National Fertilizer Marketing Limited (NFML) to offload its near expiry stock of 270,000 tonnes of urea at slashed price of Rs 1,310 per 50 kg bag in the market.
The decision was made at a meeting of the Economic Coordination Committee of the Cabinet (ECC) chaired by the Finance Minister Ishaq Dar on Thursday.
An official source said that urea manufactures have earned Rs 30 billion profit in 2015-16 from farmers, as they were allowed windfall profit even though the state-owned NFML had imported urea at a very low price.
Despite a glut in the market, urea was sold at a high price of Rs 1,900 per bag. The urea prices were tactically kept high by withholding the NFML from selling the imported commodity at lower prices. If the NFML was allowed to sell its imported urea at normal prices, the price could have declined to Rs 1,500 per bag, the source added.
The source said this resulted in decline in urea usage during the Kharif 15 and Rabi 16 period. Now, the imported urea is near expiry and if prices were not slashed the stocks could not be offloaded. However, the source said the stock would still cause woes to the farmers as it was near expiry and could be less effective than the freshly manufactured commodity.
An official statement of the Ministry of Finance said that the ECC considered and approved the sale of imported urea available at the NFML at Rs 1,310 per 50 kg bag. The ECC also granted exemption from tax and duties for import of machinery, equipment and construction materials for the National Highway Authority (NHA) for infrastructure projects under the China-Pakistan Economic Corridor (CPEC).
On the proposal brought by the Ministry of National Health Services, Regulation and Coordination, the ECC gave approval to the exemption from customs duty and sales tax on import of Salter scales for the Lady Health Workers Programme. UNICEF has provided $1.3 million available under the Gavi HSS-I fund which will be utilised to purchase approximately 38,000 scales and other equipment to be provided across the country to help children affected by stunting. Stunting can be addressed with growth monitoring and nutritional advice in the first three years of a child’s life.
As a step towards cleaner environment and better engine hygiene, the ECC also allowed the introduction of 92 Research Octane Number (RON) premium motor gasoline (petrol) in Pakistan. Currently the country is using 87 RON premium which has been discontinued in many parts of the world. The new arrangement will be effective from the next cycle of the PSO’s tender this year. The cleaner and efficient fuel will have lower emissions. The Oil and Gas Regulatory Authority will monitor the price as was the case with RON 87 PMG.
