ISLAMABAD: The government on Monday said it was mulling investigating into a recent increase in urea prices by as much as Rs249/bag despite a subsidy on feedstock gas.
Fertiliser review committee discussed recent price hike of urea bags and “noted that the government could carry out forensic audit if prices continued to climb up during kharif season”.
Minister for Industries and Production Makhdoom Syed Murtaza Mahmud chaired the meeting of the fertiliser review committee. Senior federal and provincial officials also attended the meeting.
“The forum discussed the recent price hike of urea from Rs1,768/bag to Rs1,933/bag on average, while Engro had increased the prices up to Rs2,017/bag despite government subsidy on gas (approximately 80 percent constituent of urea price),” a statement said.
The industry said that prices were increased due to financial cost of holding inventory and pending payment of subsidy and refunds from government exchequer. The ministry noted that the government had the option of conducting forensic audit, “which might be exercised if urea prices continue to increase during kharif season”.
“The government had geared up to ensure smooth, adequate and timely supply of key soil nutrients to farmers during kharif season and the decisions would be taken accordingly” the minister said. “Government would make all-out efforts to provide urea to farmers at affordable prices in a timely fashion.”
The minister assured that the government would address issues pertaining to payments and urged the industry to rationalise the prices immediately to support the farmers, who were pivotal for boosting agriculture productivity of the country.
The fertiliser review committee has been informed that the country might face a shortfall of 200,000 tons urea during peak kharif sowing season for which an import summary would be placed before June to fill the demand gap.
The meeting discussed domestic production and demand of fertilisers for kharif season. The chair was briefed that projected domestic production of urea would be 3.2 tons from April-September 2022 whereas probability of urea off take would remain 3.4 tons in the same period.
The country expects two percent increase in agronomic demand for fertilisers this year. It was noted that urea sales went up 17 percent last year. The forum noted that a significant part of urea demand would be met domestically, however, summary for urea import of 200,000 tonnes would be placed to fill the gap before demand peaks in June during the kharif sowing season.
In order to curb hoarding and profiteering, leading to 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, Federal Board of Revenue and Ministry of Interior to thwart cross border trafficking of urea.
