Unfair gas distribution policy has crippled fertiliser sector: FMPAC

Unjustifiable distribution policy of natural gas has crippled fertiliser sector in the last couple of years, reducing production of urea to bare minimum if compared with installed capacity and turning SNGPL based plants in to loss-making entities from profitable units within a span of only one year.

Fertiliser Manufacturers Pakistan Advisory Council (FMPAC) Executive Director Shahab Khawaja claimed this while interacting with members of Agriculture Journalists Association (AJA) the other day. He was accompanied by Fatima Fertiliser’s Director Marketing Muhammad Zahir, Dawood Hercules Limited (DHL) Fertiliser’s Senior General Manager Nadeem Tariq and Agritech’s Faisal Muzzamil.

Representatives of fertiliser companies claimed that three fertiliser units were already on the brink of default while the sector had four times renegotiated its loan with the banks. The workers of these plants have to bear the brunt of government policies in the shape of lay offs.

Agritech, one of the oldest fertiliser plants, has already filed petition in labour court to lay off their workforce of 3,000 and other plants will also be forced if situation does not improve. Shahab Khawaja discussed in detail issues relating to fertiliser sector on behalf of newly established representative body of fertiliser plants in Pakistan.

He said fertiliser sector had become the biggest victim of flawed gas distribution policy, saying discriminatory policy of gas distribution to various sectors of economy caused a severe blow to urea manufacturing plants besides rendering thousands workers jobless.

He said that farmers also had to pay heavy price of unwarranted closure of fertiliser plants. In the last 18 months, he revealed, farming community braved additional burden of Rs 53 billion on account of only one input ie urea fertiliser. The fertiliser industry that had been set up several years back were facing dismal future as manufacturing process came to standstill due to natural gas, he said, adding that current installed capacity of 6.9 million tons per annum was sufficient to meet domestic demand of urea.

He said presently, Pakistan was ranked seventh in the world in urea manufacturing capacity. However, he lamented, a significant portion of this capacity was laying idle because of non-availability of natural gas, which was a raw material for manufacturing urea. Against installed capacity of 6.9 million tons, urea production has been faltered to just 4.4 million tons in 2012. Fertiliser plants located on SNGPL network were provided gas for only two months this year so far, he said.

Copyright Business Recorder, 2012

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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