Fertiliser price stability: Cabinet directs ministry to draft new mechanism
- Instructions are also part of Economic Coordination Committee decision in which supply of indigenous gas to four fertilizer plants has been approved
ISLAMABAD: The federal cabinet has directed Ministry of National Food Security and Research that a mechanism should be devised to have the fertiliser companies keep prices of fertilisers stable, in line with the recommendations of the committee constituted under the chairmanship of Deputy Prime Minister, well-informed sources told Business Recorder.
These instructions are also part of the Economic Coordination Committee (ECC) decision in which supply of indigenous gas to four fertilizer plants has been approved. Fatima Fert, Agritech and FFC will get indigenous gas from Mari Fields whereas Engro will receive gas from SNGPL system through diversion of 110 MMCFD gas from Guddu Power Plant.
According to sources, Petroleum Division apprised the ECC of Cabinet that the summary was circulated to the Finance Division, Planning, Development & Special Initiatives Division, Industries & Production Division, National Food Security & Research Division, Power Division, Climate Change Division, and Privatization Division for their views and comments.
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The National Food Security & Research Division, Power Division, Industries & Production, Planning, Development & Special Initiatives Division, Climate Change Division and Privatisation Division have principally endorsed the proposal, whereas the Finance Division has furnished detailed observations.
It was further apprised by the Ministry of Energy (Petroleum Division), that the summary was also circulated to the office of the Deputy Prime Minister being head of the committee responsible for ensuring stability of urea prices in the market. A presentation on the summary was made before this committee on September 16, 2025 at MoFA and was attended by all relevant stakeholders, including the Ministers for Privatization and Climate Change. After detailed deliberations, the Committee endorsed the proposal of the Petroleum Division and directed to complete all codal and procedural formalities and submit the summary to the ECC for consideration and decision.
During the ensuing discussion, the Petroleum Division apprised the forum of the background of the proposal stating that the change was necessary as a result of paradigm shift. In response, the Finance Division raised three queries: (i) how the surplus RLNG will be dealt with; (ii) what will be the way forward for making fertiliser companies pay the long outstanding GIDC; (iii) what if fertiliser companies do not fulfil their commitment of not raising the prices of fertilisers.
The Petroleum Division explained that broader steps were being contemplated to deal with the excess volumes of RLNG, whereas the issue of GIDC was also being debated for resolution.
The forum further suggested that an implementation arrangement may be made for the fertiliser companies to adhere to the condition of keeping the prices fixed. After detailed discussion, the ECC of the Cabinet approved summary regarding allocation and Pricing of Gas from Mari Field to Fertilizer Plants.
The ECC further directed that a mechanism should be devised to have the fertiliser companies keep prices of fertilisers stable, in line with the recommendations of the committee constituted under the chairmanship of Deputy Prime Minister.
The sources said, the federal cabinet, in its one of the recent meetings has endorsed the decisions taken by the ECC.
Copyright Business Recorder, 2025
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