LAHORE: Pakistani fertiliser manufacturers have urged the government to save precious foreign exchange resources by buying locally manufactured urea instead of purchasing it from international markets.
The government should immediately stop importing urea in the country, as domestic stocks are available to cover the current season’s demand. Rather, it should divert expenditure to the import of furnace oil for the power sector in order to overcome the energy crisis, they have said. Given the financial crunch, it is difficult to comprehend why the government is willing to spend money on the import of urea when the fertiliser sector has already
offered the same at nearly (half) the price, officials said.
A source in the fertiliser sector maintained that in light of a power shortfall of 7,000 megawatts, the Ministry of Finance needs to ensure that the country’s foreign exchange reserves be spent on much-needed furnace oil. Imported urea is more expensive than furnace oil, and easily available in the domestic market, the source reiterated.
The Trading Corporation of Pakistan has already awarded a tender for importing 100,000 tons of urea from international suppliers at a price of $522.86 per ton; and is planning to import another 200,000 tons of urea. An official said that the fertiliser sector had offered the government 300,000 tons of urea at Rs33,000 per ton, inclusive of GST, against the government’s plan to import 300,000 tons of urea at Rs48,103 per ton. The import of 300,000 tons of urea will cost Rs14.4 billion (at $522.86 per ton) and the government will have to provide a subsidy of a further Rs5 billion for the imported urea. Fertiliser officials say that they want to help the government by solving the power crisis in the most economically beneficial and cost-effective manner.
Published in The Express Tribune, May 26th, 2012.