Scarcity of urea fertilizer: Minister grilled by his cabinet colleagues

ISLAMABAD: The Minister for Industries and Production (MoI&P), Khusro Bakhtiar, has reportedly been grilled by his Cabinet colleagues for misstating on availability of urea in the country.

Well informed sources told Business Recorder that during a recent meeting of Cabinet, Minister for Industries and Production while dispelling scarcity concerns, said that due to huge price differential between the domestic and international prices of urea, hoarders and dealers were interfering in the market to maximize profits.

However, his claim was rejected by his colleagues, saying that situation on ground was quite grim as farmers had to wait in long lines for getting 2-3 bags of urea. During discussion, the need for building strategic reserves to maintain stability in prices of essential items was underscored.

Minister for Finance & Revenue, Shaukat Tarin, apprised that strategic reserves, wherever possible, were being maintained, e.g., wheat, sugar, pulses, etc. Possibility for storage of palm oil would also be explored. Due to lack of cold storage facilities, the perishable items could not be abundantly stocked at present but addressing this limitation was part of the Prime Minister’s Agriculture Transformation Plan.

Urea shortage: Situation to see improvement in next 48 hours, says Fawad

In response to the suggestion of storing POL products to insulate the domestic market from international price volatility, Minister for Energy noted that for the first time in the country’s history the OMCs were fulfilling their obligation of maintaining 20-day strategic reserves. However, since these reserves were revolving, they were more for security reasons and did not help in regulating the prices.

The members exhorted on the imperativeness of having short, medium and long-term plans for availability and affordability of items such as gas, electricity, fertilizer, cement, etc. The Minister for Finance & Revenue assured that future plans in 14 identified areas had been formulated, in consultation with academia and private sector.

The Minister for Industries & Production briefed the Cabinet on the perceived shortage of urea in the country. Dispelling scarcity concerns, he apprised that sufficient stocks were available but due to huge price differential between the domestic and international prices of urea, hoarders and dealers were interfering in the market to maximize profits. He informed that last year during the Rabi season, approximately 3 million metric tons of urea was produced, whereas the production for the current Rabi season would be approximately 3.3 million metric tons. Furthermore, the federal government and the provinces had formed a monitoring mechanism, under which it was keeping a track of urea being dispatched.

Sharing anecdotal evidence, the members highlighted that situation on ground was quite grim as farmers had to wait in long lines for getting 2-3 bags of urea. The Secretary, Interior Division, briefed the Forum on measures being taken to clamp down on smuggling of urea.

He informed that a senior officer of the Division had been stationed in Balochistan to monitor the situation at the Chaman border. MO Directorate and the Customs authorities were providing full support in curbing the illegal trade. The inter-provincial movement of urea was also being closely watched. The members were of the opinion that smuggling could not be done without the complicity of government functionaries and those who had been involved should be apprehended and brought to book.

Citing various types of inflation, such as seasonal, imported, etc., the Prime Minister fretted that the price manipulation by the cartels was the most disturbing. Unfortunately, the regulators, who were supposed to protect consumers against cartelization, had been incapacitated by litigations.

Alluding to his recent meeting with the heads of regulatory authorities, he informed that 3,800 cases against the regulators were pending in the courts, out of which 900 were stay orders against penalties to the tune of Rs. 250 billion. After discussion, the Cabinet directed Secretary Interior to apprehend those involved in smuggling of urea.

Copyright Business Recorder, 2022