Govt, industry agree to slightly raise fertiliser prices

50kg bags will be priced at Rs1,890 including dealer margin of Rs50

ISLAMABAD: The government and fertiliser industry have agreed to increase prices of fertiliser by Rs10 per 50kg bag. The understanding was reached during a meeting held on Thursday.

The actual increase in fertiliser prices was Rs210 per bag but the impact of reduction in gas infrastructure development cess (GIDC) came in at Rs200 per bag. Therefore, the price will go up to Rs1,890 per bag after including dealer margin of Rs50 per bag.

“We have allowed an increase of Rs10 per bag in the price of urea to the fertiliser industry,” said Adviser to Prime Minister on Commerce, Textile, Industries and Investment Abdul Razak Dawood at a press conference.



He told the media that the fertiliser industry was seeking a hike of Rs210 per bag following the increase in gas prices. However, the net impact would be Rs10 per bag due to 50% reduction in GIDC.

He pointed out that dealers were not in control of the government, however, some measures were being undertaken to initiate action following an unjustified hike in fertiliser prices.

Dawood added that the fertiliser industry also wanted to increase prices due to depreciation of the rupee against the US dollar, increase in salaries of employees and budget measures, which hiked the transportation cost.



“However, the government did not allow them to inflate prices under these heads,” he emphasised. “Earlier, the government also allowed import of 100,000 tons of urea to maintain supply and demand balance.” First consignment of urea import will arrive in the next three days. Therefore, there was no possibility of fertiliser shortage in the Kharif sowing season, Dawood emphasised, adding that the ECC had set the price of imported urea at Rs1,800 per bag. 

Published in The Express Tribune, July 19^th, 2019.

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