The government has started work on a framework for a new fertilizer policy aimed at resolving issues related to supply of gas, production and cost of fertilizer.
Industries and Production Federal Minister Makhdum Khusro Bakhtyar presided over the high-level meeting related to the new fertilizer policy here on Thursday.
The meeting was attended by Minister for Energy Mr. Hammad Azhar and Food Security and Research Minister Syed Fakhar Imam. The senior officials of these Ministers were also present.
According to officials the meeting deliberated on the framework of fertilizer policy in detail. It was briefed that the upcoming policy would be structured on three broad areas i.e. demand, supply and pricing of soil nutrients.
It was discussed that the issue of rationalization of gas sale agreements and supply-chain maintenance through local production or imports in conjunction with demand projections would be addressed in the new fertilizer policy.
After deliberation the committee has decided to constitute three sub-committees separately to work on supply, demand and pricing strategy of fertilizers within existing agronomic practices.
During discussion, Minister Khusro Bakhtyar noted that unlike previous governments, the incumbent government utilized the optimal capacity of the urea plants to meet the demands in the outgoing rabi season. He said that the local industry witnessed record production of urea this year due to timely actions of the government.
Minister Khusro Bakhtyar emphasized to encourage the application of nutrient balance into soil in rabi & kharif season to enhance the productivity of cultivated areas in the country. For this, he advised to formulate a comprehensive policy framework with reference to infrastructure development and farmer support mechanism on a long-term basis.
Minister for Energy Mr. Hammad Azhar laid stress on efficiency analysis of manufacturing plants with respect to gas consumption of the running plants to maximize the output production of fertilizers.
As per the industry sources the fertilizer policy introduced in 2001 ensured that the growing urea demand could be adequately met with indigenous gas-based production. However, depleting gas reserves in the country pose a threat. As per recent estimates, the gas shortfall, currently at around 720 million cubic feet per day, will peak closer to 1 billion cubic feet per day in January 2022.
The increased reliance on imported gas is creating a huge gas subsidy burden on the government. Therefore, there is a need for a revised fertilizer policy, which should eliminate the subsidy on gas for the sector and enable the much-needed transition towards weighted average cost of gas.
