Fertilizer sector: Rise in gas prices to hit farmers

The ministry of industries and production has maintained that the move to enhance gas prices for the fertilizer sector would upset the national policy on agriculture. In a letter to the petroleum ministry, it stated that gas prices have traditionally been determined after thorough deliberations between stakeholders and the oil and gas regulator. However, overnight change in the policy would distort the delicate balance. Caretaker minister Sohail Wajahat H. Siddiqui had last week chaired a meeting on gas pricing and called for cutting the gas subsidy to fertilizer plants. Mr. Siddiqui had informed the meeting that the exercise was aimed at bringing uniformity in gas prices for all sectors using gas, whereas the ministry of industries maintained that by increasing gas prices for fertilizer sector, the worst sufferer would be the agriculture sector. Agriculture amounts to 23pc of the total GDP and employs over 43pc of the total workforce; and anything which hurts the agriculture economy can have a significant reaction on all those sectors which rely on agricultural produce, according to the letter. In a recent meeting with the officials of the ministry of industries, a delegation of the fertilizer sector had stated that the proposal would inflict serious blow to the fertilizer industry in Pakistan. They said that fuel prices in Middle East are around $0.75 for 1.75mbtu whereas it is $3.2 for gas and $5.4 for fuel in Pakistan for fertilizer sector. “This would reflect a hike of Rs 800 to Rs 1,000 per urea bag,�? said a representative of the fertilizer sector, adding that high prices would eventually make fertilizer import more attractive than local production. The ministry of industries was informed that it would lead to job cuts as well as total reliance on imports and the situation would eventually place farmers and the government functionaries at the disposal of importers and market players. An official of the ministry of industries said that only a developed and blooming industrial sector can ensure economic wellbeing of the country.