LAHORE: Following an upward revision of taxes imposed on fertilisers and factoring in cost of other variables, Fauji Fertiliser has increased prices of urea and diammonium phosphate (DAP) farm nutrients. Fauji Fertilizer Company (FFC) has increased urea prices by Rs350 per 50kg bag effective from 1st July-2023, according to M. Waqas Ghani of JS Research. FFC urea's retail price now stands at Rs2,910 per 50kg bag.
The price hike exceeds the necessary adjustment to account for the impact of federal excise duty (FED), and is likely intended to cover for the increase in gas prices announced earlier, although not explicitly for fertiliser companies on the Mari network.
Furthermore, Fauji Fertilizer Bin Qasim Limited (FFBL) has also hiked prices of urea by Rs162 per 50kg bag to pass on impact of FED, taking prices to Rs3,212/bag.
Fauji companies diammonium phosphate (DAP) rose prices by Rs480 per 50kg bag to pass on the impact of recently imposed taxes. FFC and FFBL DAP prices now stand at Rs9,995 per bag and Rs10,045 per bag, respectively.
A similar announcement by Engro Fertilizers (EFERT), other major producer of farm inputs, is also expected. It may noted that the government imposed federal excise duty on fertilisers in the federal budget 2023-24.
The government has imposed FED at the rate of 5.0 percent on the fertiliser sector. Another major change from the previous bill is that DAP is now no longer tax exempt and will be taxed at the rate of 5.0 percent.