ISLAMABAD – In a major enforcement action, the Competition Commission of Pakistan (CCP) has imposed Rs375 million in penalties on six urea manufacturers and their industry association for colluding to fix fertiliser prices, harming market competition and farmers nationwide.
Following a suo motu inquiry, the CCP concluded that Fatima Fertiliser, Fauji Fertiliser Company, Fauji Fertilizer Bin Qasim, Fatima Fertiliser Company, Engro Fertiliser, and Agritech Limited, in coordination with their trade body FMPAC, engaged in anti-competitive conduct under the pretext of running a public awareness campaign.
A two-member bench of the CCP, comprising Dr. Kabir Ahmed Sidhu and Mr. Salam Amin, found that the companies “effectively fixed the price of urea across the country,” violating Section 4 of the Competition Act, 2010.
Each manufacturer was fined Rs50 million, while FMPAC was hit with a Rs75 million penalty.
Despite claims of pricing independence, all six companies were charging an identical rate of Rs1,768 per bag, regardless of differences in input costs, economies of scale, and gas prices. The CCP bench termed this uniformity a “manifestation of concerted conduct” that distorted competitive pricing mechanisms.
The companies had attempted to justify their actions under the ‘state action doctrine’, citing a government directive for price awareness. However, the CCP rejected this defense, saying there was no formal compulsion to fix prices and that the directive was misused to announce uniform rates in coordination.
The CCP also noted that prior warnings in 2010, 2012, and 2014 had failed to curb such practices, and the Fertiliser Review Committee had repeatedly flagged supply imbalances.
Chairman Dr. Sidhu stressed that industry associations must not serve as platforms for sharing price-sensitive information, adding that the Commission remains committed to ensuring market competitiveness and consumer welfare.
