Govt vows uninterrupted gas supply to fertiliser plants

LAHORE: Government on Friday vowed to ensure uninterrupted gas supply to fertiliser manufacturers during winter and restrain pass-through of tariff hike on urea prices.

Abdul Razak Dawood, advisor to Prime Minister on Commerce, Textile, Industry and Production and Investment said the federal government has policy to boost manufacturing in the country.

“We have decided to run all the fertiliser plants at full capacity to avert any possible urea shortage during ongoing rabi season,” Dawood said, addressing a Fertilizer Review Committee’s (FRC) meeting.

PM advisor, who holds the status of federal minister said all urea manufacturing plants will continue to get gas till March. Urea manufacturing plants on the Sui Northern Gas Pipelines’ network operate till December due to gas curtailment.

Dawood said urea manufacturing plants will now be operating during January to March 2019 as well in order to utilise available production capacity. The advisor said the aim of the government is to maximise urea production in the country in order to keep fertiliser prices at the current level of Rs 1,615/bag even after around 50 percent jump in gas tariff.

“Even if federal government has to give subsidy the objective is to keep urea prices at the current level,” he added. “Government will not allow urea prices to increase further.” Dawood said the paramount focus of the present government is to run local industry at all costs to spur economic growth through reviving the industrialisation.

Over the past several years, the Fertilizer Review Committee was chaired by secretary level officials, while minister of industries usually avoided the august platform. Industry’s representatives hailed the participation of the advisor at the FRC meeting.

Dawood said fertiliser plants, being an asset of the country, should not be kept idle and maximum output be obtained. Tariq Khan, managing director of Fauji Fertiliser and Chairman Fertiliser Manufacturers of Pakistan Advisory Council lauded efforts of government to run fertiliser plants and assured the government of industry’s support for implementation of farmers-centric policies.

Khan said the industry will roll back impact of recent gas tariff increase on urea prices as soon as the government implements subsidy mechanism. The meeting was told about unpaid subsidy of around Rs20 billion.

It was urged to take steps for early payment of dues to manufacturers. It was told that opening fertiliser inventory in October was 110,000 tons, compared to the benchmark of 200,000 tons, due to late start of two closed urea plants.

Fertiliser demand is estimated at 3.05 million tons for rabi 2018/19. Gas supply is to ensure 3.196 million tons of fertiliser production.

Winter closing inventory is expected at 350,000 to 360,000 tons, including planned urea import of 100,000 tons.

A government’s official said the closing stock may dip due to lower opening inventory and lead to a need of additional import of 80,000 to 100,000 by end of the current fiscal year to meet

demand as well as build up stocks for smooth supply.