Govt fixes urea prices at Rs1,768 per bag

May 25, 2022 (MLN): The government on Tuesday has fixed the retail price of urea at Rs1,768 per 50-kilogram bag from the existing price of Rs1,900-2,000 per bag.

As per the latest notification under S.R.O No.607(I), 2022 by the Ministry of Industries & Production, provinces, and federal agencies are allowed to add an allowance to the notified prices for extra transportation costs in remote or distant areas.

The said SRO will remain effective till July 07, 2022, unless rescinded or modified earlier.

However, concerned producers, dealers, or importers are given an opportunity to offer their view and justification along with the submission of relevant documents, data, and information by May 27, 2022, on the recent increase in prices by fertilizer manufacturers.

Fauji Fertilizer (FFC), Agritech, and Fatima Fertilizer (FATIMA) increased Urea prices by Rs165/bag whereas Engro Fertilizer (EFERT) raised prices by Rs249/bag in March 2022 on the back of rising inflationary impact.

According to the report by Topline Securities, the urea industry is likely to provide justification to the government of a hike in Urea prices and may challenge the said SRO in a court of law. They can say that government should not interfere in the free market where the price is determined by the supply and demand situation and they have passed on inflationary impact to Urea prices.

The huge delta between local and international prices (local prices are 70-80% cheaper than international prices) can lead to more smuggling and a shortage of urea in the domestic market hence maintaining local prices at current levels may not be sustainable, it added.

On the other hand, the government observed that the recent price increase of urea was totally unjustified and without any valid reason and can adversely affect the farmers and urea application in ongoing Kharif season.

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