ISLAMABAD The News reported on Tuesday that the government has raised the gas selling prices for three fertiliser plants that use gas from Mari Petroleum Company Limited (MPCL) in an effort to harmonize feed gas costs for the fertiliser industry with industrial rates.
The three facilities, Engro Fertilizer, Fauji Fertiliser (Rahim Yar Khan), and Fatima Fertiliser, have been notified by the Oil and Gas Regulatory Authority (Ogra) that their notice is effective from October 1, 2023.
For feedstock and fuel stock, the plants will pay Rs. 580 and Rs. 1,580 per MMBtu, respectively. The action is being taken in response to allegations that the fertiliser sector is not providing farmers with subsidies. Despite having significantly raised prices, these corporations may raise urea prices even more after the ruling.
It’s unclear how these cash will be distributed to small farmers. The expected yearly net positive differential margin from the fertiliser business will be about Rs16 billion for FY 2023–2024 with this revision to the gas selling price for fertiliser.
Recall that in order to maintain MPCL’s Habib Rahi Limestone gas production, Mari Petroleum Company signed agreements with three significant fertilizer companies in December of last year.
“A Framework Agreement for the installation of Pressure Enhancement Facilities at Mari Gas Field, Daharki, Sindh with FFC, ENGRO, and FATIMA has been executed,” Mari stated.
Installing compressors inside the Mari Field, optimizing the surface pipeline network, and building pipeline infrastructure are also part of the project.
The Ogra Ordinance stipulates that gas sale prices for SSGCL fertilizer plants.However, since October 23, 2020, MPCL’s plant prices have not changed.
It should be mentioned that six of Pakistan’s ten fertilizer factories obtain specialized supplies from Mari’s network. Six Mari-based facilities have Gas Supply Agreements that are good until June 2024.
