The federal government has decided to conduct a study of the fertilizer sector.
Sources told ProPakistani that the government made this decision during a meeting of the Economic Coordination Committee of the Cabinet to discuss the shortage of urea in the rabi season 2021-22. The attendees agreed that the Planning Commission would undertake a study and devise a medium-term strategy for the fertilizer sector.
The fertilizer industry had requested the government for the complete deregulation of the sector without gas subsidies last October because urea manufacturers are internationally competitive and can operate without the support of the government. Subsequently, the federal Cabinet had reportedly given the approval for the deregulation of the gas sector last month.
The Trading Corporation of Pakistan recently asked the Ministry of Industries and Production to negotiate with the local manufacturer of fertilizer to allow the provision of urea in order to save the foreign exchange. Urea manufacturers had reportedly approached the government for permission to export it. However, on 6 January, the ECC had approved the importing of 50,000 tons of urea from China on an immediate basis, subject to clearance from the Pakistan Standards and Quality Control Authority.
Sources said that National Fertilizer Development Centre has reported a minor deviation from standard specifications in the imports of the specs of granular and prilled urea from China. Additionally, the department mentioned importing urea may be troublesome for distribution and marketing in the country in the wake of wide punitive powers for the restriction of the marketing of sub-standard or unregistered fertilizer products under their respective fertilizer control acts (orders) by the provincial authorities.
The sources added that under the Deputy Chairman of the Planning Commission, a committee has also recommended that the Sui Southern Gas Company Limited (SSGCL) will ensure the provision of system gas/RLNG to plants in order to meet the targets for the month of January 2022.
The committee has also recommended the finalizing of a subsidy disbursement mechanism for DAP fertilizer, which will, in turn, reduce the pressure on Urea Offtake. There is a reported shortage of urea fertilizers in the entire country, due to which the chances of missing the wheat targets are high.