Fauji, Fatima raise urea prices
LAHORE: The increase in the rates of urea compost products by a couple of companies running their plants on subsidised gas has raised many eyebrows.
Fatima Fertiliser Company Ltd (FFCL) on Tuesday raised the price of its brand Sarsabz urea by Rs551 per bag, taking the maximum retail price to Rs4,400.
On April 9, Fauji Fertiliser Company Ltd (FFC) increased its urea prices by Rs633 per bag to Rs4,400.
This increase of around 17 per cent has been made even though the gas input cost has remained unchanged.
FFC and FFCL are still receiving gas from the Mari network at a subsidised price of Rs580 per mmBtu compared to other manufacturers on the SSGC and SNGPL networks, which faced a tariff hike to Rs1,597 per mmBtu in February. As a result, price discrimination for the same homogeneous product (gas) has been created in the fertiliser industry.
An official of the affected stakeholders says that this is a missed opportunity for the government, leading to a revenue loss of up to Rs100 billion due to delayed gas reforms that would have standardised gas pricing for all fertiliser manufacturers.
According to him, the only long-term solution to stabilizing urea prices is to eliminate this anomaly in gas pricing among manufacturers. Instability in the fertiliser market also results in excessive profiteering, hoarding, and frustration for the farmer.
Published in Dawn, April 24th, 2024