As the Sui Northern Gas Pipeline (SNGPL) braces for more gas-fields’ maintenance work in the coming weeks, a severe shortage of urea is expected in October, the start of Rabi season. As farmers go around looking for urea, a chaos is expected while political connections will come into play. Already a urea shortage of 0.9 million tonnes was expected this Rabi season, as the government had failed to import enough urea and also curtailed gas supply to local fertiliser manufacturers.
To make matters worse, heavy rains and flooding in lower Sindh have destroyed farmlands, reducing agricultural outputs. “We need all the urea we can get for Rabi to ensure agriculture output targets are met,” a prominent farmer association expert said, “If there is not enough urea for Rabi, it will be a self-inflicted wound to the economy by the government.” The fertiliser industry on the SNGPL network is getting only 72 percent of gas – below the 80 percent promised by the gas utility.
The current urea price is still Rs 1,378 per bag but dealers are taking advantage of the shortage by hoarding supplies and have increased prices up to Rs 1,600. Lately the prices have come down as government started supplying gas to the fertiliser industry. The extra supply of gas has brought the prices down but if gas is curtailed further, more shortage of urea is expected. With the Rabi season approaching, it is critical to supply gas to the fertiliser sector over other industries, including CNG and the power sector, as other sectors can switch to diesel or furnace oil but natural gas is a raw material for urea and has no substitutes.
The government’s gas allocation policy states that preference should be given to consumers then fertiliser companies and then industries. “It is strange how the government is ignoring the agriculture sector that represents 22 percent of the economy,” the agriculture expert said. “The government needs to ensure gas as priority to the fertiliser industry otherwise the country’s output will be lower and affect all the other food and important industries of the country.”
