ISLAMABAD   -  The indecisiveness of policy makers regarding the provision of gas to RLNG-based fertilizer plants, during upcoming the Rabi season, has pushed the government to import Urea at almost 66.65 percent (Rs 2932.59 per 50 kg bag) higher price than the local market price.

The government will pay a subsidy of Rs 2932.59 per 50-kg bag on the imported Urea, official documents available with The Nation reveal.

Sources said that the on May 07, 2024, the Economic Coordination Committee (ECC) of the Cabinet had allowed Trading Corporation of Pakistan (TCP) to import 200,000 MT of Urea on open tender and G to G basis.

Accordingly, TCP issued tender of 150,000 MT which was opened on July, 29, 2024. TCP had received bids within the stipulated time with the lowest bidder being MS West Trade International FZF UAE with offered rate of $358.99 per MT for the supply of 157500 MT.

The cost estimates for the quantity 157500 MT would be Rs18.48 billion. The landed price of 50-kg bag has been estimated at Rs 5832.59 per bag. After adding incidentals of NFML @Rs 1500 per bag, the cost will be Rs. 7,332.59 per bag. The lowest prevailing urea fertilizer price in the market is Rs 44,00 per bag. The first ship is expected to reach Pakistan on 16 August. The total dollar requirement for 157,500 MT would be $56.540 million, while for 100,000 MT it would be $35.899 million.  Earlier, a meeting of Fertilizer Review Committee was held on August 01, 2024 in which data for Kharif 2024 and Rabi 2024-25 was presented by National Fertilizer Development Center (NFDC).

The data showed that there would be no shortage during Kharif and Rabi in case RLNG-based fertilizer plants remain operational during the upcoming Rabi season. If the supply of gas to RLNG-based plants is suspended during Rabi season 2024-25, there would be a shortage of 351,000 MT.

The decision to import 100,000 MT of Urea was taken due to the absence of decision for provision of gas to RLNG plants during Rabi season, the documents revealed.