Urea prices increased by Rs130 per bag

Rates go up despite government's assurance of subsidy

KARACHI: Urea manufacturers have raised prices by around Rs130 per bag in an attempt to pass the impact of gas price hike on to consumers despite government assurances that the state will pay subsidy to them.

According to Pak-Kuwait Investment Company AVP Research Adnan Sami Sheikh, the manufacturers have raised urea prices by Rs130 per 50kg bag following the increase in natural gas prices by the government.

"In a bid to provide relief for farmers, the government is considering a price subsidy again. But the size and mechanism of it is yet to be determined," Sheikh told The Express Tribune.

"Considering past subsidy is still outstanding, the manufacturers did not wait for the government and raised prices by the full amount," he added.



Industry officials also confirmed the urea price hike.

"Some manufacturers with gas supply at concessionary rates are likely to benefit as the cost increase for them will be lower," Sheikh said. "However, the price hike, especially the subsidy, usually hampers market dynamics as dealers try to extract maximum benefit from the situation. So, abnormal sales can be expected."

Another Research Analyst Shankar Talreja of Topline Securities said the urea price had jumped from around Rs1,570 to Rs1,700 per bag.

In a notification, Fauji Fertilizer Company announced that the dealer transfer price of its Sona Urea would be Rs1,700 per bag while the retail price would be Rs1,740.



According to an industry official, other fertiliser companies follow Fauji Fertilizer in increasing or decreasing fertiliser prices. Meanwhile, officials have also confirmed price increase by Engro Fertilizers.

Published in The Express Tribune, October 6^th, 2018.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.