LAHORE: Urea prices are likely to increase by at least Rs100 per bag owing to the government`s commitment to the IMF to implement a semi-annual gas tariff adjustment by February 2025.

In its recent report, the IMF revealed that the federal government has agreed to announce the adjusted tariff rates semi-annually to meet the revenue requirements of the Sui companies.

Recently, both Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Ltd (SNGPL) submitted formal requests to the Oil and Gas Regulatory Authority (Ogra) for a gas price increase of up to 50 per cent to cover their estimated revenue needsfor 2024-25.

Earlier this year, the caretaker government approved a 175pc price hike for fertiliser manufacturers on the SNGPL network, leading to a urea price increase of approximately Rs900 per bag.

`As seen earlier in February, fertiliser players on the Sui network will be impacted by this incremental gas cost, and they will be forced to revise their urea prices upwards, said Tanveer Ahmed, an analyst at Topline Securities.

Typically, other fertiliser producers follow suit even though their input costs remain unchanged,` explains the analyst.-Staff Reporter