LAHORE - The manufacturers are going to reduce the prices of urea by around Rs70 per 50kg bag following the cut in feed gas price by the Oil & Gas Regulatory Authority (OGRA).

As per the latest notification available on OGRA official website, feedstock gas price for fertilizer makers has been reduced by Rs77/mmbtu, back to pre-gas price hike levels (Rs123/mmbtu). However, OGRA has slightly increased the gas tariff for IPPs, power stations of WAPDA and KE and Foundation power company (Daharki) Ltd, by Rs13/mmbtu to Rs613/mmbtu.

As per industry experts, the gas price reduction for fertilizer would be in lieu of reciprocal fall in urea bag prices. Industry sources said that fertilizer makers have agreed to reduce the bag price by Rs70, much lower than the govt demand of Rs200 per bag. However, the quantum of urea price reduction is not confirmed yet.

According to calculations, this will have a positive impact on Fauji Fertilizers (FFC), Fauji Fertilizers Bin Qasim (FFBL), Engro Fertilizer (EFERT) and Engro Corporation (ENGRO).

Fatima Fertilizer (FATIMA) will remain unaffected since FATIMA is getting concessionary feed gas. Just to highlight, EFERT’s new plant is getting concessionary gas but not the old plant so it will be partially affected due change in feed gas price.

Meanwhile, Fauji Fertilizer Company Limited (FFC) has welcomed the announcement of roll-back in feed gas prices for fertilizer sector raised back in Sept 2015. CE&MD FFC Shafqaat Ahmed welcomed the government’s gesture and stated: “This initiative will enable the fertilizer industry to continue its support to agri sector in Pakistan by providing fertilizer at affordable prices”. As a consequence, FFC has announced an immediate reduction in its urea prices.

He stated that FFC is particularly grateful to Prime Minister Nawaz Sharif, Ministry of Finance, Ministry of Industries, Ministry of Petroleum and Natural Resources and Ministry of National Food Security & Research for their concerted endeavours to uplift the farm economy besides reducing stress on domestic fertilizer industry.

“FFC, being leader in domestic urea production, has always worked closely with the government to provide affordable fertilizers to the farmers. The company remains indebted to the government for honouring this common goal and helping domestic producers in providing cheaper fertilizer to the farmers,” said a press release.

FFC also assures the government and the farmers community of its support in all efforts aimed at relieving stress on agri sector through downward revision of input costs.