Govt May Allow Import of Urea to Overcome Production Loss

The federal government is considering importing 200,000 MT of urea to overcome the production loss due to gas pressure issues.

Sources said that the Ministry of Industries and Production has proposed ECC to allow the Trading Corporation of Pakistan (TCP) to initiate a process for the import of 200,000 MT urea on a G2G basis and international open tender.

The ECC on March 15, 2023, directed Petroleum Division to supply indigenous gas to Fatima Fertilizer (Sheikhupura) and Agritech (Mianwali) plants immediately for bridging the gap between demand and supply of urea fertilizer for Kharif season 2023, up to May 31, 2023.

Subsequently, gas was restored by Sui Northern Gas Pipelines Limited (SNGPL) to the subject plants on March 24, 2023, and plants started production between March 27th and 28th.

Sources said that the Ministry of National Food Security and Research had earlier projected the annual off-take for urea fertilizer at 6.508 MT, but later on, the ministry revised the annual off-take estimates for urea fertilizer due to higher off-take of urea fertilizer in March by 86,000 MT and production loss of 22,000 MT by Fauji Fertilizer Bin Qasim Limited (FFBL) due to gas pressure issues.

Further, the ministry has projected an import requirement of 800,000 MT if both SNGPL-based plants are shut down by May 31, 2023.

Sources also said that Fertilizer Review Committee (FRC) on April 6, 2023, endorsed the proposal of the ministry for the Import of 200,000 MT of Urea fertilizer by May 15, 2023, besides it also proposed to provide uninterrupted gas supplies to Fatima Fertilizer (Sheikhupura Plant) and Agritech beyond May 31, till December 2023.

On the other hand, the Ministry of Commerce has proposed TCP to invoke Rule 5 of PPRA for G2G procurement and be granted exemptions from Rules 8, 9, 13, 35, 38, and 40 of Public Procurement Regulatory Authority (PPRA) for doing international tenders. It also proposed TCP to allow land the whole quantity of urea till the end-June and that NFML be declared as the recipient agency.

The Ministry of National Food Security and Research has supported the proposal that imported urea should land in the country latest by mid-May.