Urea Prices Set to Increase After ECC Move

The Economic Coordination Committee (ECC) of the Cabinet has allowed manufacturers to include financing costs which will eventually increase the cost of Urea in the local market. Sources told ProPakistani that the Ministry of Industries and Production had presented the summary concerning the mechanism of sales of imported Urea at a basket price along with locally manufactured Urea. The Ministry of Industries and Production on the direction of the caretaker Prime Minister has prepared different modalities in consultation with the Fertilizer industry for lifting imported Urea from Port and National Fertilizer Marketing Limited (NFML) warehouses. Sources said that the Ministry of Industries and Production has proposed including all incidentals related to lifting and NFML’s associated cost in the current urea prices based on weighted average sale prices. In addition, it also proposed that manufacturers will make payment of lifted imported urea to the government in 45 days. In return, the manufacturers will include financing costs in price calculation for the recovery period till December 2024, sources added. It is pertinent to note that Farmers are currently grappling with acquiring Urea and other fertilizers through unofficial channels due to the failure of district administrations to ensure the availability of Urea fertilizers at government-specified rates. Farmers are compelled to purchase Urea in the black market at prices ranging from Rs. 4,500 to Rs. 5,000 per bag, significantly higher than the government-notified rate of approximately Rs. 3,500. Sources said that prices of Urea will further increase in the market which eventually puts further burden on compelled farmers. The Ministry of Industries also informed the ECC that the government will continue its efforts to provide gas to all fertilizer plants enabling them to produce urea and recover the cost of imported urea over a 12-month period and to avoid further imports. According to the Finance division, the ECC approved the mechanism for weighted average price with the direction to National Fertilizer Marketing Limited (NFML) to ensure reasonable prices for urea and the Ministry of Industries & Production to provide oversight to the whole process.