ISLAMABAD: Taking serious notice of the rising prices of Diammonium Phosphate (DAP) and urea, Prime Minister Shehbaz Sharif has constituted a high-level committee to review fertilizer prices and recommend a way forward, well-informed sources told Business Recorder.
The committee includes Minister for Economic Affairs Ahad Khan Cheema (convener), Minister for National Food Security and Research Rana Tanveer Hussain, Minister of State for Power Abdul Rehman Khan Kanju, and Ahmed Umair. The committee has been directed to convene immediately to address the issue.
This development coincides with the Petroleum Division’s submission of a summary to the Economic Coordination Committee (ECC) seeking allocation of indigenous gas to three fertilizer plants — two in Punjab and one in Karachi.
Fertilizer manufacturers: Dar reviews suggestions for gas supply
Industry sources noted that DAP prices, which are linked to international markets, have increased by Rs 500 per bag domestically. Urea, on the other hand, is reportedly being sold at Rs 300 per bag below market rates.
Insiders suggest the issue was raised by a cabinet member during a recent meeting on wheat crop assessment and the National Wheat Policy, prompting the Prime Minister to intervene.
Meanwhile, in a letter to different Ministers and Secretaries, Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) have urged the clearing of the dust; the fertilizer industry in Pakistan consists of 10 strategically located manufacturing facilities. This capital-intensive industry, with a replacement value of USD 8.5 billion, has a production capacity of 10 million tons of complex fertilizers, including 7 million tons of urea. It plays a critical role in ensuring national food security and supporting economic prosperity.
While ensuring timely availability of fertilizer to farmers at affordable prices the fertilizer industry in Pakistan maintains that it has remained a silent partner of farmers and the agriculture sector, yet certain misperceptions prevail, often based on incomplete information. And argues that: (i) it has consistently provided indigenous urea to farmers at locally competitive prices significantly lower than international markets. (August 2025 Rs 4250-4300 vs Rs 7600 per bag). Annualized support to the farmers is approximately Rs 560billion, and historically, local urea has been sold as low as nearly 25 percent (2022) of global prices, insulating farmers from international price volatility; (ii) on foreign exchange savings and national subsidy reduction, FMPAC said that through import substitution of Urea, local fertilizer industry is contributing significantly to forex saving and avoiding cash subsidy burden for the government; (iii) by producing domestically, the industry annually saves USD 3-4billion in foreign exchange through import substitution. It also saves the government approximately Rs 300-400 billion indirect subsidies, which would otherwise be needed if urea were imported.
Copyright Business Recorder, 2025
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