Karachi, Engro Fertilizers is taking a stand to ensure the availability of urea at government-approved prices by enforcing strict adherence to pricing guidelines among its dealers. In a concerted effort to support government initiatives aimed at stabilizing urea prices for the farming community, the company organized dealer conferences in Lahore, Multan, and Hyderabad, emphasizing the importance of maintaining integrity and supporting farmers' prosperity.
According to Engro Fertilizer Limited, Atif Muhammad Ali, Vice President of Marketing at Engro Fertilizers, highlighted the company's commitment to the highest standards of integrity and the expectation for dealers to ensure urea is available at official prices. Engro has made a point of not raising the price of imported urea, aiding the government's support to the agricultural sector.
The conferences also served as a platform to discuss the impact of recent gas price increases and the existing disparity in gas prices among different fertilizer manufacturers. The price for feedstock gas on the SNGPL and SSGC networks, which accounts for 60% of the total fertilizer production capacity, has risen from PKR 580/mmbtu to PKR 1,597/mmbtu. In contrast, manufacturers on the Mari network, producing 40% of the capacity, still benefit from a subsidized rate of PKR 580/mmbtu. This discrepancy has led to market distortions, with multiple urea prices based on the varying gas input costs for fertilizer manufacturers, enabling middlemen to potentially earn excessive profits ranging from PKR 80 to 100 billion.
Ghulam Ahmed, Patron in Chief of the All Pakistan Fertilizer Dealer Association, advocated on behalf of the dealers for a uniform gas price for all fertilizer manufacturers. He argued that this measure would ensure a consistent urea price across the market, eliminating speculation and normalizing prices for the benefit of the country.
By standardizing gas prices for fertilizer producers, the government has the opportunity to stabilize urea prices for farmers and capture PKR 80 to 100 billion in revenue that would otherwise benefit middlemen. These funds could be utilized by provincial governments to offer direct subsidies on fertilizer to farmers or to invest in the development of modern farming techniques to enhance agricultural productivity.