A consortium comprising Engro Fertilisers Ltd (EFL), Fatima Fertilisers, and Fauji Fertilisers has announced a significant investment exceeding $300 million in the Gas Pressure Enhancement Facilities (GPEF) project at the Mari network.
This strategic investment aims to ensure a steady supply of gas for domestic urea production, which is crucial for maintaining the country’s food security.
During a media workshop, Engro Fertilisers’ Chief Financial Officer, Ali Rathore, revealed that Engro Fertilisers’ contribution to the capital expenditure of this project would surpass $100 million.
Rathore emphasized the critical need for Pakistan, the world’s fifth-largest consumer of urea, to expand its production capacity in response to rapid population growth.
He advocated for the introduction of consistent and fair gas pricing policies to stimulate further investment in the fertilizer sector.
Rathore highlighted the necessity for multi-billion dollar investments to establish globally competitive fertilizer plants.
He argued that equalizing gas prices among manufacturers would not only encourage investment in plant modernization and expansion but also enhance efficiency and gas utilization.
The CFO also touched upon recent policy changes, noting the removal of subsidies for fertilizer manufacturers on the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Ltd (SNGPL) networks, which account for 60% of the sector’s capacity.
Despite these changes, manufacturers on the Mari network still benefit from subsidized gas prices, leading to market disparities.
Rathore pointed out that the existing price discrepancies have fostered opportunities for middlemen and argued that a uniform gas price would level the playing field for all fertilizer manufacturers, ultimately stabilizing urea prices for farmers.
