21:30
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LAHORE: Efforts are being made to run fertiliser plants located near distribution lines on rotation in winter and it is expected that Engro’s fertiliser plant would get at least 40 million cubic feet per day (mmcfd) gas from three gas fields, reported a senior official of Ministry of Petroleum and Natural Resources.
“We have prepared a summary for the next meeting of the Economic Coordination Committee (ECC) of the cabinet for getting approval of a short-term plan regarding resumption of gas supplies to fertiliser plants,” the official said. He was hopeful that gas would be supplied to domestic urea plants within a month.
Lack of gas supply to fertiliser plants is a source of concern for economic managers as it puts an extra burden on the economy and adversely affects the cost of production of farmers, official sources said. Economic managers have expressed concern over a bill of $1.2 billion for importing over 2.2 million tons of urea fertiliser from January 2011 to June 2012. Additionally, an imported urea subsidy would cost Rs60 billion.
The decision to cancel the plan of importing 300,000 tons of urea for the current Rabi sowing season is a reflection of increasing dissent by the ministry of finance. Moreover, the Ministry of Petroleum and Natural Resources has given a green signal for supplying gas to fertiliser plants, even in winter months.
Sources claimed that with the objections by the finance ministry and the elections around the corner, the government is all set to focus on important sectors of the economy, which are directly related to rural and urban populations. Nargis Sethi is tending to the issue of power outages while Dr. Asim Hussain has been assigned the task of solving the unending woes of the fertiliser sector as farmers constitute the largest vote bank in Pakistan, sources said.
Meanwhile, importing urea has become more expensive than importing diesel and furnace oil for power generation, according to an official. Sources claim that Hussain, Ahmed Mukhtar and Sethi are working out a comprehensive formula to solve the issue of power shortages and bring down urea prices in the country in the next three months.
Official sources have said that the Ministry of Water & Power and the Ministry of Petroleum and Natural resources are working to resolve the issue of gas supplies fertiliser plants.
In the absence of locally manufactured cheap urea, farmers lose hundreds of millions of rupees every month as they have to purchase expensive urea.
The urea bag, which was available at Rs800 per 40 kg in 2010, is now being sold at Rs1,680 per bag. The government cannot afford to import urea and farmers being the biggest vote bank must also be appeased by the government. Hence, the new year could bring a substantial decrease in the urea prices.
To bring down urea prices, the government is reconsidering its policy on the fertiliser sector, and the Ministry of Petroleum and Natural Resources, after much deliberation, has finally come up with a comprehensive plan to solve the current fertiliser industry crisis.
In the long term plan, fertiliser plants would be allowed to negotiate gas agreements with gas producers directly. Though the fertiliser industry has agreements with the SNGPL to provide them gas for nine months in a year, the agreements with SNGPL have not worked as it was forced by the government and powerful lobbies to provide gas even though they did not have year-long contracts.
Sources in Islamabad claimed that the Ministry of Petroleum and Natural Resources has proposed a 1000km pipeline, which will cost $300 to 400 million to build. Further, the pipeline will be laid down by gas utilities as third party and Ogra will allow this income including O&M charges to the companies.
“We have prepared a summary for the next meeting of the Economic Coordination Committee (ECC) of the cabinet for getting approval of a short-term plan regarding resumption of gas supplies to fertiliser plants,” the official said. He was hopeful that gas would be supplied to domestic urea plants within a month.
Lack of gas supply to fertiliser plants is a source of concern for economic managers as it puts an extra burden on the economy and adversely affects the cost of production of farmers, official sources said. Economic managers have expressed concern over a bill of $1.2 billion for importing over 2.2 million tons of urea fertiliser from January 2011 to June 2012. Additionally, an imported urea subsidy would cost Rs60 billion.
The decision to cancel the plan of importing 300,000 tons of urea for the current Rabi sowing season is a reflection of increasing dissent by the ministry of finance. Moreover, the Ministry of Petroleum and Natural Resources has given a green signal for supplying gas to fertiliser plants, even in winter months.
Sources claimed that with the objections by the finance ministry and the elections around the corner, the government is all set to focus on important sectors of the economy, which are directly related to rural and urban populations. Nargis Sethi is tending to the issue of power outages while Dr. Asim Hussain has been assigned the task of solving the unending woes of the fertiliser sector as farmers constitute the largest vote bank in Pakistan, sources said.
Meanwhile, importing urea has become more expensive than importing diesel and furnace oil for power generation, according to an official. Sources claim that Hussain, Ahmed Mukhtar and Sethi are working out a comprehensive formula to solve the issue of power shortages and bring down urea prices in the country in the next three months.
Official sources have said that the Ministry of Water & Power and the Ministry of Petroleum and Natural resources are working to resolve the issue of gas supplies fertiliser plants.
In the absence of locally manufactured cheap urea, farmers lose hundreds of millions of rupees every month as they have to purchase expensive urea.
The urea bag, which was available at Rs800 per 40 kg in 2010, is now being sold at Rs1,680 per bag. The government cannot afford to import urea and farmers being the biggest vote bank must also be appeased by the government. Hence, the new year could bring a substantial decrease in the urea prices.
To bring down urea prices, the government is reconsidering its policy on the fertiliser sector, and the Ministry of Petroleum and Natural Resources, after much deliberation, has finally come up with a comprehensive plan to solve the current fertiliser industry crisis.
In the long term plan, fertiliser plants would be allowed to negotiate gas agreements with gas producers directly. Though the fertiliser industry has agreements with the SNGPL to provide them gas for nine months in a year, the agreements with SNGPL have not worked as it was forced by the government and powerful lobbies to provide gas even though they did not have year-long contracts.
Sources in Islamabad claimed that the Ministry of Petroleum and Natural Resources has proposed a 1000km pipeline, which will cost $300 to 400 million to build. Further, the pipeline will be laid down by gas utilities as third party and Ogra will allow this income including O&M charges to the companies.
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