Govt to provide feed gas to fertiliser industry at unified rate

Ministry of Industries will hold meeting with manufacturing companies to discuss pricing on August 3

ISLAMABAD: The government will provide a unified price of feed gas to fertiliser manufacturers in the country according to directions given by the Economic Coordination Committee (ECC), it was learnt on Monday.

According to the details, the new plan was discussed during a meeting held at the Ministry of National Food Security and Research here on Monday. The meeting, chaired by Minister of Food Tariq Bashir Cheema, was also attended by Federal Minister for Industries and Production Syed Murtaza Mahmud and Minister of State for Petroleum Davison Dr Musadik Masood Malik.

According to officials privy to the development, the meeting was informed that fertiliser manufacturing companies are getting gas at different rates whereas participants were of the view that these companies should be supplied gas at a unified rate to create a level playing field.

The meeting was also informed that the government aims to give direct subsidies to the farmers whereas a track and trace system for fertiliser bags can help in this regard.

Food security hinges on agricultural production. To ensure food security, all of the relevant ministries and departments should sit together to work coherently, the meeting was told.

It was decided that the Ministry of Industries will hold a meeting with fertiliser manufacturing companies to discuss the pricing of gas on August 3.

The Ministry of Industries and Production had submitted a summary to ECC on issues faced by Fatima Fertilizer ( Sheikhupura Plant) and Agritech. Both the SNGPL based plants are operated by provisioning of RLNG on a cost sharing basis.

Gas rate for operation of these plants is worked out on the basis of Variable Contribution Margin (VCM). Due to price increase in fuel prices and other factors, both plants had approached M/o I&P for revision of VCM and capping of GST at the price paid by the plants.

The ECC after discussion approved the proposal to ensure compliance with the earlier decision of the ECC and the Federal Cabinet of shifting both the plants to indigenous gas. The ECC further directed Ministries of Petroleum, Finance, National Food Security and Industries & production to work out the gas price/VCM for the Fertilizers. The ECC also decided that Sales tax may be charged on the actual price of the gas being paid by the company.

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]


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