Fertiliser plant delay forces govt to import urea
ISLAMABAD: A delay in the commissioning of a large fertiliser plant has compelled the government to immediately import about 400,000 metric tons of urea with an estimated official subsidy of about Rs600 per bag for the coming Kharif season.
Sources told Dawn on Friday that “a decision has been taken in principle” to import urea through the Trading Corporation of Pakistan (TCP) for distribution by the National Fertiliser Corporation (NFC).
The Economic Coordination Committee of the Cabinet which would meet on March 9 with Petroleum Minister Naveed Qamar in the chair is likely to approve the import plan prepared by the ministry of industries and production.
Pakistan needs over 3 million metric tons of urea for the Kharif season (April-Dec), but officials estimate local urea stock to be about 2.5 million metric tons. Retail price of local urea stands at about Rs770 per bag while imported urea would cost around Rs1,350 per bag, leaving a gap of Rs580 per bag that would be picked up by the government.
The sources said international urea prices hovered around $300 per metric ton and the government would import the commodity, possibly from Saudi Arabia and Qatar.
In a recent presentation, the fertiliser industry had informed the government that there would be no need for import if the Fatima Fertiliser started production according to the schedule.
The plant’s start-up has been delayed for three months due to technical reasons, the sources said.
A joint venture of the Fatima Group and Arif Habib Group, the plant when completed would produce 500,000 tons of urea, ammonia and nitric acid, besides 360,000 tons of nitro phosphate, 420,000 tons of calcium ammonium nitrate and 300,000 tons of nitrogen phosphorous potassium.
The industries ministry had earlier announced that Pakistan would not import urea and rather start exporting different fertilisers with the completion of the Fatima plant.
The ECC was expected to consider providing sovereign guarantees for a Rs17 billion project for deepening and widening of Port Qasim navigational channel, for which a consortium of Chinese Exim Bank and Fortis Bank has offered about $150 million buyer’s credit.
Mainly because of rising shipping needs and declining port capacity, the deepening and widening of the navigational channel has become crucial to attract larger ships, which could not dock at present.
The project, when completed would be able to handle ships with 14-metre draught.