May 14, 2014- BR
The Economic Co-ordination Committee (ECC) of the Cabinet to be held tomorrow (Thursday) is likely to decrease the price of imported urea by Rs 50 per bag as one time dispensation as a special case. Sources said that the financial impact of the reduction in urea price would be Rs 263 million and would put additional burden on the exchequer in the form of increased subsidy. The sources further said the government is already sharing the burden of consumers of urea in a range of Rs 850 to Rs 1500 per bag depending on the international price of the commodity.
A summary would be presented to the ECC to be chaired by Finance Minister Ishaq Dar with a request that National Fertilizer Marketing Limited (NFML) may be allowed to decrease the price of existing 263,000 metric tons of old stocks by Rs 50 per 50kg bag, as one time special dispensation. They added that in a summary the Finance Ministry requested the ECC that the country may import up to 0.125 million tons initially and the situation of demand may be reviewed during the third week of April, 2014 with the suggestion that any corrective action may be taken at that time.
They further said that in pursuance of the ECC decision, a meeting of Fertilizer Review Committee was held in the Ministry of Industries and Production on 15-04-2014 to review the demand and supply situation of urea in the country. The Committee unanimously decided that in view of the existing stocks after the fresh import of 125,000 metric tons as well as satisfactory domestic production situation there is no further need to import urea at this moment.
The Fertilizer Review Committee, however, noted with concern that following the increase in price of local and imported urea, sales of imported urea declined by 70 percent as compared to last year and the NFML presently holds stocks of 263,000 metric tons of unsold urea from imports made for the Rabi seasons 2013-14. Fertilizer Review Committee feared that NFML will not be able to dispose off its available stock of 263,000 metric tons at current prices, and prolonged storage may destroy the urea stocks due to moisture, resulting in loss to the exchequer of Rs 10 billion.