Urea Prices: Engro irks Govt that warns to conduct Forensic audit
The Engro has irked the government for increasing prices of urea despite receiving subsidized gas that accounts for around 80% constituent of urea price. The government has warned to conduct a forensic audit of fertilizer companies if they continue rising prices in Kharif season.
In a meeting held here Monday in the Ministry of Industries and production, participants discussed the recent price hike of urea from Rs. 1768/bag to 1933/bag on average, while Engro had increased the prices up to Rs 2017/bag of urea despite the government supplying gas (approximately 80% constituent of urea price) at subsidized rates.
The industries ministry asked the fertilizer industry on Monday to reduce the prices immediately to provide relief to the farmers.
New Fertilizer Policy: Govt to review Gas pricing for fertilizer plants
Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmud chaired the meeting of the fertilizer review committee today.
The participants of the meeting included a representative of the fertilizers manufacturing industry and officials from the Finance Division, Petroleum Division, Ministry of Food Security and Research as well as officials of Provincial agriculture departments.
The meeting discussed the domestic production and demand for fertilizers for the Kharif season.
Urea availability in Kharif Season
The officials briefed the projected domestic production of urea that would stand at 3.2 MMT from April-September 2022 whereas the probability of urea offtaking would remain at 3.4 MMT in the same period.
They also told that there would be a 2% increase in agronomic demand for fertilizers this year. Officials also noted that urea sales went up by 17% last year.
The forum noted that a significant part of urea’s demand would be met domestically, however, a summary for urea import of 2 lac tonnes would be placed to fill the gap before demand peaks in June during the Kharif sowing season.
To curb the hoarding and profiteering, leading to the smuggling of urea across the border due to high price differential, the body decided to take up strict measures in cooperation with the law enforcement agencies, FBR, and Ministry of Interior to take action across the border trafficking of urea.
Speaking to the meeting, the Minister said that the government had geared up to ensure a smooth, adequate, and timely supply of key soil nutrients to farmers during the Kharif season and the decisions would be taken accordingly.
He said that government would make all-out efforts to provide urea to farmers at affordable prices timely.
The forum also discussed the recent price hike of urea from Rs. 1768/bag to 1933/bag on average, while Engro had increased the prices up to Rs 2017/bag of urea despite the government supplying gas (approximately 80% constituent of urea price) at subsidized rates.
Reason for Increase in urea Prices
The industry responded that they increased prices due to the financial cost of holding inventory and pending payment of subsidies & refunds from the government exchequer.
The Ministry noted that the government had the option of conducting a forensic audit which may exercise this option if urea prices continue to increase during Kharif season.
The Minister assured that government would address issues about payments and urged the industry to rationalize the prices immediately to support the farmer’s pivotal boosting agriculture productivity of the country.
