Thursday, May 16, 2013 - Karachi—The fertilizer plants invested US$ 2.3 billion in last 4 years making Pakistan self sufficient in urea production but this core investment to support agriculturewas neglected mercilessly by relying on imports of urea at the cost of much needed foreign exchange in the country.
Fertiliser Manufacturers Pakistan Advisory Council (FMPAC) while congratulating PML(N) and its leadership for securing the majority in election has expressed the hope that PMLN Government would revive the agriculture economy of the country to ensure farmers’ well being and food security of 190 million countrymen.
Shahab Khawaja Executive Director FMPAC has said that Pakistan cannot afford to spend hundreds of millions of dollars on urea import and we are hopeful that PMLN government would ensure judicious distribution of gas amongst all the sectors of economy. With consistent gas supply to these plants, Government can ensure timely availability of this key farm input to farmers at the cost effective rates and would also help government to reduce its fiscal deficits as well as subsidy spend.
All other industries have alternative fuel options except fertilizer sector that uses gas as raw material to produce the key farm input, urea for the farmers that ensure food security of the masses as well as provide raw material to important industries like textile and food processing. SNGPL based four plants faced more than 300 days of gas curtailment in year 2012. If gas is discontinued to fertilizer plants in 2013, Pakistan would have to import 1 million tons of urea which can cost national exchequer US$ 450 million dollars and a subsidy of Rs. 21 billion to match the imported urea price to domestic urea prices.
He said that Fertilizer sector is not burning the gas to run the plants, it offers maximum value addition by converting the raw gas into precious urea grains and country hugely benefits from the fertilizer industry. He informed that by not producing urea locally we are not only hurting the interest of poor farmers, who ensure food security of 190 million people of this country, but we have to import urea which is the most expensive form of energy on MMBTU basis, costing around $23/MMBTU, whereas RFO and LNG would be 30-50% less expensive than urea on a MMBTU basis.
Pakistan despite being an agriculture economy, agriculture sector remained the worst hit and most neglected area of economy in last few years. With the PMLN government in the power, we are confident that Mian Nawaz Sharif would ensure early revival of the agriculture sector through better and long-term policie.
PMLN leadership fully understands the importance of agriculture sector for the quick revival of the economy and fertilizer sector being an integral part of agriculture economy would be given due importance while allocating the precious gas resources.
Mian Nawaz Sharif’s pro industry approach, which he demonstrated in his previous governments, is a sign of relief for the industries and it was his government’s policies that lead to increase of fertilizer production in the country, he added. He said that due to worst-ever gas curtailment to fertilizer sector in last 3 years, country spent foreign exchange of US$ 1.5 billion and also paid a subsidy of around Rs. 80 billion on the imports of 3.4 million tons during 2010-12. He said that Fertilizer sector was the only sector bringing in direct investment and now this investment is at the verge of risk as severe gas curtailment of the industry has resulted in closure of these plants risking billions of dollars of investment in the sector.Thursday, May 16, 2013 - Karachi—The fertilizer plants invested US$ 2.3 billion in last 4 years making Pakistan self sufficient in urea production but this core investment to support agriculturewas neglected mercilessly by relying on imports of urea at the cost of much needed foreign exchange in the country.
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Fertiliser Manufacturers Pakistan Advisory Council (FMPAC) while congratulating PML(N) and its leadership for securing the majority in election has expressed the hope that PMLN Government would revive the agriculture economy of the country to ensure farmers’ well being and food security of 190 million countrymen.
Shahab Khawaja Executive Director FMPAC has said that Pakistan cannot afford to spend hundreds of millions of dollars on urea import and we are hopeful that PMLN government would ensure judicious distribution of gas amongst all the sectors of economy. With consistent gas supply to these plants, Government can ensure timely availability of this key farm input to farmers at the cost effective rates and would also help government to reduce its fiscal deficits as well as subsidy spend.
All other industries have alternative fuel options except fertilizer sector that uses gas as raw material to produce the key farm input, urea for the farmers that ensure food security of the masses as well as provide raw material to important industries like textile and food processing. SNGPL based four plants faced more than 300 days of gas curtailment in year 2012. If gas is discontinued to fertilizer plants in 2013, Pakistan would have to import 1 million tons of urea which can cost national exchequer US$ 450 million dollars and a subsidy of Rs. 21 billion to match the imported urea price to domestic urea prices.
He said that Fertilizer sector is not burning the gas to run the plants, it offers maximum value addition by converting the raw gas into precious urea grains and country hugely benefits from the fertilizer industry. He informed that by not producing urea locally we are not only hurting the interest of poor farmers, who ensure food security of 190 million people of this country, but we have to import urea which is the most expensive form of energy on MMBTU basis, costing around $23/MMBTU, whereas RFO and LNG would be 30-50% less expensive than urea on a MMBTU basis.
Pakistan despite being an agriculture economy, agriculture sector remained the worst hit and most neglected area of economy in last few years. With the PMLN government in the power, we are confident that Mian Nawaz Sharif would ensure early revival of the agriculture sector through better and long-term policie.
PMLN leadership fully understands the importance of agriculture sector for the quick revival of the economy and fertilizer sector being an integral part of agriculture economy would be given due importance while allocating the precious gas resources.
Mian Nawaz Sharif’s pro industry approach, which he demonstrated in his previous governments, is a sign of relief for the industries and it was his government’s policies that lead to increase of fertilizer production in the country, he added. He said that due to worst-ever gas curtailment to fertilizer sector in last 3 years, country spent foreign exchange of US$ 1.5 billion and also paid a subsidy of around Rs. 80 billion on the imports of 3.4 million tons during 2010-12. He said that Fertilizer sector was the only sector bringing in direct investment and now this investment is at the verge of risk as severe gas curtailment of the industry has resulted in closure of these plants risking billions of dollars of investment in the sector.
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