Ministry of Industries Recommends Extending Gas Supply to Fertilizer Plants

The Ministry of Industries and Production (MoI&P) has submitted a summary to the Economic Coordination Committee (ECC) outlining multiple steps to ensure fertilizer requirements for the Kharif Season, including imports of 0.2 million tons of urea and extending gas supply to SNGPL-based urea manufacturers till December 31, 2023.

According to Business Recorder, the proposal is based on recommendations made earlier by the Ministry of National Food Security and Research. It also suggested that fertilizers should land on ports latest by mid-May.

The food ministry had previously projected annual urea fertilizer off-take at 6.508 MMT, but in a letter dated April 3, 2023, it revised the annual estimates owing to substantial offtake in March by 86,000 MT and a production loss of 22,000 MT by Fauji Fertiliser Bin Qasim Limited (FFBL) due to gas issues.

The food ministry has projected imports of 800,000 MT if Fatima Fertilizer (Sheikhupura) and Agritech (Mianwali) plants are shut down by the end of the month as scheduled. 

Fertilizer Review Committee (FRC) earlier reviewed the matter in a meeting on April 6 and endorsed the proposals made by the food ministry regarding the import of 200,000 MT of Urea, extending gas supply to Fatima Fertilizer and Agritech till December 2023 and ensuring that gas pressures are maintained for optimum urea production.

According to reports, the Ministry of Commerce has weighed in on the matter recommending invoking the PPRA rule 5 for G2G procurement and exempting TCP from rules for doing international tenders.

It also proposed allowing fertilizer to arrive till the end of June 2023, declaring National Fertilizer Marketing Limited (NFML) as the recipient, directing Finance Division to allocate Cash Credit Limit (CCL), making arrangements for Technical Supplementary Grants (TSG) in order to repay the loan and avoid mark-up; and also allocating federal share for the Trading Corporation of Pakistan (TCP) in Commerce Ministry demand to avoid markup.

Meanwhile, the Power Division has agreed to divert gas from Guddu Thermal Power Stations till 31 August while the Finance Division has endorsed the proposal with no subsidy requirement. MoI&P will consult with provinces to lift the imported at full cost and will ensure the imported urea is limited to the quantity agreed by the provinces.

MoI&P will hold meetings with provinces and federal Ministries of Finance, Food Security & Research, and Commerce before seeking the final approval of ECC.

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