April 20, 2024 (MLN): The government has asked Fauji Fertilizer Company Limited (PSX: FFC) to justify its recent urea price hike of Rs633 per bag to Rs4,400 per bag, especially since there has been no corresponding increase in gas prices.
The price hike was announced by the company on April 4, 2024, raising certain concerns as there had been no change in its gas input cost.
The company is still receiving Mari network gas at the subsidized price of Rs580/mmbtu compared to other manufacturers on Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) networks that faced a tariff hike to Rs1,597/mmbtu in February 2024.
The government has taken notice of this sudden urea price hike by FFC as there has been no increase in the manufacturers’ gas input costs.
In case FFC is unable to provide a convincing justification for the price increase, the Ministry of Industries & Production may take administrative measures against it under Section 5 of the Price Control and Prevention of Profiteering and Hoarding Order, 2021.
