ISLAMABAD-The provinces have defaulted on paying their 50 percent share in subsidy on the import of urea, which they had earlier agreed during the PTI government.
Some provinces have refused, while others are reluctant to pay their 50 percent share of subsidy in the import of urea agreed during the previous government, official source told The Nation. It was agreed that the subsidy on the import of 100,000 MT of urea will be shared equally by the federal and provincial governments. Giving the details, the source said that the Trading Corporation of Pakistan (TCP) imported 100,000 MT of Urea from China, in pursuance of Cabinet’s decision of 11th January, 2022.
The said urea was distributed among provincial governments by National Fertilizer Marketing Limited (NFML). As per Cabinet’s decision, the subsidy on imported urea was to be shared at 50:50 basis by the federal and provincial governments. As TCP had imported urea by obtaining loans from commercial banks on the basis of cash credit limit approved by the Finance Division, markup was being continuously charged on the loans obtained by TCP. The total amount of subsidy payable by federal government, including markup up till 30 April, 2023 was Rs 5.358 billion whereas, which will reach Rs5.568 billion by the end of ongoing fiscal year.
Ministry of Industries and Production may be advised to ensure early clearance of subsidy payable by the provinces on imported urea. The source said that that Government of Punjab and Government of Khyber Pakhtunkhwa had agreed to share the subsidy on 50:50 basis but they defaulted as no funds were released by them so far. The Government of Balochistan on the other hand had declined to share 50 percent cost of subsidy. While government of Sindh had not provided any response so far, the source added. Federal government has directed Ministry of Industries & Production, in consultation with the Finance Division and Ministry of National Food Security to pursue the matter for payment of subsidy on import of urea by the provinces as per their shares.