The federal government has opted to discontinue subsidized gas for the country’s fertilizer industry, particularly in the production of urea, Business Recorder reported on Sunday.
This decision was reached during a recent cabinet meeting, where the Petroleum Division highlighted that the absence of subsidy would necessitate either domestic consumers or the Finance Division to bear the price differential.
The Ministry of Industries and Production observed that the benefits of subsidized gas had not translated into lower urea prices for farmers. Considering these factors, the Cabinet unanimously agreed that gas supplied to fertilizer plants should be at full prices rather than subsidized rates.
Furthermore, the Cabinet directed the Petroleum Division to oversee the implementation of this decision. In January 2024, the Apex Committee (AC) of the Special Investment Facilitation Council (SIFC) instructed the Federal Board of Revenue (FBR) to conduct a tax audit of urea/fertiliser companies to review tax invoices on income earned by urea sellers and dealers against the quantity of urea sold/distributed to farmers.
According to a report compiled by former caretaker Minister for Power and Petroleum, Muhammad Ali, fertilizer companies are reaping substantial profits due to the stagnation in gas prices for the fertilizer sector.
