Engro Fertilizers Welcomes Gas Price Increase

Staff Report

Engro Fertilizers has welcomed the recent gas price increase as a positive stride forward.

Engro Fertilizers commends the government for its decision to eliminate the subsidy previously provided to fertilizer manufacturers utilizing the SNGPL network, constituting 60% of the total fertilizer manufacturing capacity.

This adjustment involves raising the feedstock prices from PKR 580/MMbtu to PKR 1,597/MMbtu, marking a substantial 300% increase in fertilizer production costs.

While this development is a promising step, it represents only partial progress, as the remaining 40% of fertilizer manufacturing capacity, reliant on the Mari network, continues to benefit from the subsidized price of PKR 580/MMBtu.Ogra Notifies Massive Hike in Gas Prices

Pakistan’s current financial predicament is dire, characterized by a mounting debt crisis, with the debt-to-GDP ratio exceeding 70%, and a looming repayment obligation of over USD 27 billion in foreign debt by November 2024.

Given these challenges, the nation cannot withstand further fiscal strains or incremental measures that fail to address the root causes of Pakistan’s economic woes.

It is imperative to end the reliance on government subsidies to facilitate genuine progress and break free from the cycle of indebtedness.

In the best interest of the nation and to address the issue comprehensively, we urge the government to entirely phase out all subsidies from the fertilizer sector.

Only through complete elimination can the government alleviate the nation’s debt burden and truly serve the interests of the Pakistani populace.

This transition is estimated to yield approximately PKR 150 billion in revenue, which could be allocated to targeted agricultural projects and initiatives aimed at fostering economic activity and growth.

This presents an excellent opportunity for all fertilizer manufacturers to demonstrate their global competitiveness even in the absence of subsidized gas. Standardizing gas prices will incentivize manufacturers to enhance efficiency, streamline operations, and attract capital investment into the fertilizer industry.

Furthermore, the fertilizer sector, operating efficiently without subsidies, can serve as a model for other industries, potentially prompting the government to consider phasing out subsidies across various sectors of the economy.

In summary, we wholeheartedly endorse the government’s initial step in partially discontinuing subsidies for fertilizer manufacturers.

We urge the government to persevere with this bold strategy and eliminate all subsidies to alleviate the debt burden, promote efficiency, attract investments, and contribute to a prosperous future for Pakistan,” Engro Fertilizers said in statement.