To support the Government’s efforts to ensure urea availability at official prices, Engro Fertilizers has urged its dealers to comply with company guidelines on pricing and strictly ensure product availability to the farmers.
To enforce guidelines for selling Urea at MRP, Engro Fertilizers hosted dealer conferences in Lahore, Multan, and Hyderabad. Addressing the event participants, Engro Fertilizers VP Marketing Atif Muhammad Ali commented that “Engro Fertilizers has always adhered to the highest standard of integrity and holds the same expectations from its dealers. To support the prosperity of farmers, Engro dealers must ensure urea availability at official prices. Further, Engro Fertilizers has not increased the selling price of imported urea to facilitate the Government in providing support to farmers.”
At the conference, the dealers were also updated on the recent gas price hike and the disparity of gas prices among different fertilizer players. Feedstock gas prices for fertilizer manufacturers on the SNGPL and SSGC networks, which produce 60% of the total capacity, have increased from PKR 580/mmbtu to PKR 1,597/mmbtu. On the other hand, the remaining fertilizer manufacturers on the Mari network, which produce 40% of total capacity, are still on the subsidized price of PKR 580/mmbtu.
As a result of this discriminatory gas tariff, price distortion has been created in the market. Multiple urea prices exist in the market based on different gas input costs for fertilizer manufacturers. This price distortion has allowed the middleman to earn excessive profits of PKR 80 – 100 billion.
On behalf of fertiliser dealers, all Pakistan Fertilizer Dealer Association Parton in Chief Mr Ghulam Ahmed shared, “It is in the country’s wider interest that a uniform gas price should be set for all fertiliser manufacturers. This will allow a single urea price to prevail, end market speculations and normalise the urea prices.”
By equalising the gas price for all fertilizer manufacturers, the government can help stabilize urea prices for farmers and earn PKR 80 – 100 billion in revenues that the middlemen would otherwise pocket. The provincial government can then use this revenue to issue direct fertilizer subsidies to farmers or develop modern farming practices to uplift overall agricultural productivity.
