Fertilizer industry may face PM’s wrath over urea prices

ISLAMABAD: Prime Minister Imran Khan has shown annoyance over a delay in the uniform reduction in urea prices by the fertilizer industry despite a waiver of the Gas Infrastructure Development Cess (GIDC).

According to sources, the premier, who is perturbed over the delay, is likely to take strict action against the fertilizer industry, which has not reduced the urea prices despite getting relief in the cess.

They said the PM had directed Adviser to the Prime Minister on Commerce, Textile, Industries and Production Abdul Razak Dawood to invite the management of fertilizer plants and discuss with them the issue of differential of reduction in the retail price of a fertilizer bag following a reduction in GIDC.

PM Imran had made it clear to the Adviser that if the fertilizer industry was not ready to reduce the urea price the gas supply on subsidized rates would be stopped, sources added.

A uniform reduction in urea prices would be ensured so that the entire benefit of GIDC waiver reaches the common man, sources quoted Razak Dawood as having said.

Sources further said the next cabinet meeting would take up the matter as the cabinet’s members had already expressed reservations over not providing relief to the farmers by few fertilizer plants despite GIDC waiver.

Following a reduction in the GIDC, the two largest fertilizer companies of the country- Fauji Fertilizer and Engro Fertilizer- have reduced their prices for urea fertilizer by Rs300 and Rs160 per 50kg bag respectively.

Under the new GIDC amendments introduced by the government late last month, fertilizers feed and fuel gas were reduced to Rs5 per bag from the original price of Rs400 per bag.

The GIDC was initially imposed as a levy by the PPP government in 2011 on gas consumers in the industrial sector.

The money collected under the head GIDC was to be used for the construction of gas infrastructure projects like the Iran-Pakistan Pipeline, and TAPI etc.

However, in December 2013 the GIDC was declared unconstitutional by the Supreme Court, but in 2015 the government had re-imposed the cess.

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Ahmad Ahmadani
Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected].
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