Minister orders action against unilateral increase in Urea prices

Federal Industries Minister and Pakistan Muslim League-Q leader Chaudhry Pervaiz Elahi has rejected increase in urea prices by urea manufacturing companies and asked the authorities concerned to take immediate action against the urea manufacturers over unilateral increase in urea prices.
Talking to a delegation of farmers hailing from different districts at his Gulberg residence on Tuesday, Elahi said: "The decision of making unilateral increase in urea prices by urea manufacturing companies is unacceptable and authorities concerned have been asked to take action."
It may be noted that Engro Fertilisers increased urea price by Rs 400 per bag to Rs 1980 on Monday. Urea price was Rs 850 per bag last year, which means there has been a price hike of more than 100 percent in a period of just one year. Increase in urea price on Monday is the second price hike in the fourth quarter of year 2011.
Chaudhry Pervaiz Elahi further said that there exists no justification of increasing in urea prices on the plea of gas supply curtailment. As a matter of fact, Urea manufacturers in Pakistan are getting gas at the lowest rate, if compared with the rest of the world, he said.
According to him, Punjab Chief Minister Muhammad Shahbaz Sharif agreed to gas distribution formula in the Council of Common Interest (CCI) that led to cut in gas supply to urea manufacturing companies. The delegation members apprised Elahi about difficulties faced by them due to hike in urea prices and other agriculture inputs.
On the other hand, agriculturists expressed grave concern over hike in urea prices and said it would prove devastating for the agriculture sector. According to them, farmers usually use two bags of urea per acre. Thus their cost would increase by Rs 800 per acre after this hike. Since 30 million acres of wheat is sown in Punjab alone, Rs 24 billion additional would have to be paid by growers in the province. They said: "Urea prices are increasing owing to absence of any regulatory check. Eighty percent of urea price is connected with gas prices. When there is no increase in gas prices, why has the price of urea been increased, they questioned?