The year 2011 was the worst period for domestic fertiliser plants as they could hardly produce 4.9 million tonnes of urea against the installed capacity of 6.9 million tonnes due to announced and unannounced gas curtailment throughout 2011. Sui Northern Gas Pipelines Limited (SNGPL) based fertiliser plants were the worst hit as they could hardly managed to achieve 31 per cent of fertiliser production against their installed capacity, due to non-availability of gas. Currently, all four fertiliser plants on SNGPL network are facing a complete shutdown, which has resulted in a huge production and financial loss to these fertiliser plants.
Dawood Hercules plant only produced 39 per cent of urea, which stood at 199,000 tonnes against a production capacity of 513,000 tonnes. Pak-Arab Fertiliser hardly produced 27 per cent of urea which stood at 29,000 tonnes against a production capacity of 106,000 tonnes. Agritech only produced 34 per cent of urea which stood at 146,000 tonnes against a production capacity of 428,000 tonnes and Engro’s new plant only produced 27 per cent of urea which stood at 347,000 tons against a production capacity of 1.26 million tonnes. Dawood Hercules Fertiliser CEO Rashid Lone said that SNGPL based plants could only produce 31 per cent of their installed production capacity that resulted in billions of rupees of loss to the fertiliser industry, which has invested over $2.3 billion in enhancing its production capacity in last three years. He informed that all four fertiliser plants on the SNGPL network, including Pak-Arab, Dawood Hercules, Engro’s new plant and Agritech, remained the biggest victims of chaotic gas situation. Instead of providing gas to local fertiliser plants to produce urea domestically, the government preferred to import 1.45 tonnes of urea by spending a hefty amount of $783 million from precious foreign exchange. In addition, the government also paid huge subsidy of Rs54 billion on the imported urea to keep it at the price of locally produced urea. Agriculture contributes around 24 per cent to the GDP of Pakistan and it also provides raw materials to all the major industries of Pakistan including, textiles and sugar. For the economy of Pakistan to prosper, it is important for agricultural yields to go up which is only possible through the application of fertilisers in the right quantity at the right time. Decline in production poses a severe threat to the yield on the crops, resultantly; the country might miss its agriculture and export targets and also aggravate inflation in the country, which is already higher than the regional peers.
