BEING a stakeholder of the agricultural industry and business community in Pakistan, I would urge the government to cut gas prices and sales tax, besides reducingthe`gasinfrastructure development cess` (GIDC) to help the local fertiliser industry produce urea at a more competitive cost.
Now, the price of a 50kg bag of imported urea is Rs200 lower than the locally produced urea, whereby many traders are drawn towards importing urea and causing financial challenges for local fertiliser producers.
A timely response from the government can help Pakistan`s fertiliser industry in cutting their cost of production and reducin the price of local urea bags. Strengthening the local fertiliser industry will make local urea more affordable for poor farmers and boost our agricultural production, while reducing dependence on world fertiliser prices.
Unfortunately, gas prices have been going up over the past several years.The average gas price in Pakistan for the fertiliser sector is almost double of what is offered in the Middle East. These factors have caused a sharp escalation in the cost of urea production.
The government must ensure sufficient supply of gas to the fertiliser industry, andrevise the high sales tax and GIDC to make locally-produced fertiliser cheaper.
Otherwise, cheap imported urea will soon flood the market, and inventories of unsold local urea will pile up, creating serious challenges for local urea producers.
