Fauji Fertilizer Bin Qasim Ltd (PSX: FFBL) has increased urea prices by Rs. 158 per bag.
FFBL’s new Urea price stands at Rs. 5,489/bag, effective from today, while urea prices for both Engro Fertilizers Limited (PSX: EFERT) and Fauji Fertilizer Company Ltd (PSX: FFC) stand at Rs. 3,767/bag.
On Tuesday, FFBL first increased urea prices by Rs. 1,350 per bag to pass on the latest spike in gas prices.
The Economic Coordination Committee (ECC) of the Cabinet last week approved up to 35.13 percent increase in gas prices to woo the International Monetary Fund. This effectively withdrew the subsidy for fertilizer manufacturers that get their gas from the SNGPL network, which represents 60 percent of all fertilizer manufacturing capacity.
The government has increased the feedstock prices from Rs. 580/mmbtu to Rs. 1,597/mmbtu, almost a 300 percent increase in the cost of producing fertilizer.
Top members of the industry have urged the government to do the same with the remaining 40 percent of the fertilizer manufacturing capacity that is on the Mari network, which is still at the subsidized price of Rs. 580/mmbtu.