PML-N government is apparently committed to curtailing loadshedding. To achieve this goal it has also decided not to provide natural gas to fertilizer plants based on Sui network following the policy of PPP government, whereas, fertilizer plants getting supply from Marri gas field are not affected. This is an irrational decision as fertilizer plants use natural gas as raw material to produce a value added product. About 4 million tons per annum of fertilizer production is lost due to this decision. Thermal power could be generated by using furnace oil or coal but fertilizer could not be produced except using gas.

Instead of deliberately losing production and importing fertilizer, it would be prudent not to stop gas supply to fertilizer plants. To curtail ‘circular debt’, a tax should be imposed on gas supply to fertilizer plants (both Sui and Marri networks) to bring the gas price at par with furnace oil on BTU basis. Revenue generated through the proposed tax should be directly transferred as a cross-subsidy for the purchase of furnace oil to generate power. It is learnt that the government has made a provision of Rs 30 billion in FY 2013-14 for subsidy on imported fertilizer. If local production is restored by providing gas, this subsidy could be utilised for indigenous fertilizer production instead of imported fertilizer.


Lahore, June 18.