Importing urea through the private sector undermine government’s policy of protection of the domestic industry
KARACHI: The Express Tribune informed us that the government is formulating a policy for importing urea through the private sector (“Go-ahead: Ministry to frame policy for urea import by private sector”, March 5). Such an idea appears to be mischievously initiated to undermine the government’s policy of protection of the domestic industry, only recently issued by the Ministry of Commerce.
The world over, governments are conscious of the fact that their domestic industry is the backbone of their economy and must be protected. The Government of Pakistan is believed to be equally mindful and this is visible from the recent sugar export policy, where almost Rs15 per kilogramme are paid as a subsidy to domestic producers to compete in the international market. The fertiliser industry is virtually the backbone of the agriculture sector and has been selling fertiliser at much lower rates than the international market, despite gas curtailment. The government used to pay a huge amount in subsidies for imported fertiliser, besides spending precious foreign exchange. Today, when international petroleum prices have receded, they have brought gas prices down as well. Gas, being the basic input for urea production, controls the production cost. The average price of feed gas in Pakistan for urea is above five dollars per MMBTU, while it has come down to two dollars in the world, especially the Middle East, from where imports into Pakistan are made to bridge the gap between demand and production.
Therefore, it is hoped that such an insane suggestion by ill-informed quarters will not be considered, as it will not only negatively impact the local industry but also push international prices up. The closure of a strategic industry will cause damage to the confidence of investors and deprive the government of a major chunk of income received in the form of taxes and levies. It will also deprive thousands of highly skilled and unskilled workers of an income. The present state of urea availability in the country is enough to avoid wasting hard-earned foreign exchange on the import of urea. Above all, unscrupulous elements will dump the market with poor quality and adulterated fertiliser, thereby destroying the farmers’ economy and further endangering food security at large. The government should instead bring gas prices at par with those in the Middle East to protect the local strategic industry in the larger national interest.
Zammarah Awan, Advocate City Court
Published in The Express Tribune, March 10th, 2016.
Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.
