In a bid 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 of 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 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 that exists among different fertilizer players. Feed stock gas prices for fertilizer manufacturers on SNGPL and SSGC network, 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, that 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 with multiple urea prices existing in the market based on different gas input costs for the fertilizer manufacturers. This price distortion has provided the middleman an opportunity to earn excessive profits of PKR 80 – 100 billion.
All Pakistan Fertilizer Dealer Association Parton in Chief Mr. Ghulam Ahmed on behalf of fertilizer dealers shared that “It is in the country’s wider interest that a uniform gas price should be set for all fertilizer manufacturers. This will allow a single urea price to prevail, end market speculations and normalize the urea prices.”
By equalizing gas price for all fertilizer manufacturers, the government can help stabilize urea prices for the farmers and earn PKR 80 – 100 billion in revenues that would otherwise be pocketed by the middlemen. This can further be used by the provincial government to issue direct subsidies on fertilizer to farmers or development of modern farming practices to uplift the overall agricultural productivity.