Fertilizer Sector to get Gas at par with Export Segment

December 27, 2021

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The federal government has decided to put the domestic fertilizer sector at par with the export sector in the priority gas supply list for a three-month period until March 31, 2022.

The decision comes at a time when farmers across the country are facing shortage of urea supplies, as hoarders are hoarding Urea and selling at higher prices.

According to a summary submitted to the ECC on December 16, 2021, the Ministry of the Industries and Production reported that there are currently two networks of urea plants (namely Fatima Fertilizer and Agritech) and a DAP / urea plant (which is Fauji Fertilizer Bin Qasim Limited) on the SSGCL network.

The ministry said that due to the current priority arrangement, the FGBQL plant on the SSGCL network will suffer from reduced gas supplies this winter and its annual turnover (ATA) will remain in January 2022 due to a shortage of system gas. because the gas in the SSGC system is being redirected to other priority sector including Export Sector.

FFBQL reported that if 63 million cubic feet of gas were fully supplied during the current spring period of 2021-2022, they would add 90,000 to 100,000 tons of urea to national supply.

The National Fertilizer Development Center (NFDC) estimates urea fertilizer stocks to deplete and remain lower then the demand from December 2021 to February 2022.

Keeping in view the above facts, the ministry suggested that, due to high fertilizer prices in the International market (making import unfeasible), as well as taking into account food security, the preferential gas supply regime could be revised for the fertilizer sector and equalize the fertilizer sector on SSGCL and SNCPL network, to ensure adequate urea production for the Rabi Season.