FMPAD demands resumption of gas to fertilizer sector

General Lahore

Lahore: Fertilizer Manufacturers Pakistan Advisory Council (FMPAC) has pleaded to Prime Minister Mir Hazar Khan Khoso and Ministry of Petroleum and Natural Resources to resolve the crisis being face by fertilizer industry due to continuous gas curtailment.

Shahab Khawaja, Executive Director FMPAC while appreciating the alternative long term solution for four SNGPL based fertilizer plants said that the Consortium of these four plants is engaged in hectic activities after the approval of long term arrangement was conveyed to them by Ministry but even with full fast track efforts; the long-term arrangement will not be completed before March 2014. Hence, next 12 months will be crucial for fertilizer industry. He pleaded Prime Minister to instruct SNGPL for full and immediate resumption of gas to most deprived SNGPL based fertilizer plants.

He further said that the industry in General and particularly the four plants located on SNGPL and FFBL plant on SSGC network have been the worst hit plants in 2012 and still, only Agritech and DH Fertilizers have started production in March 2013. It is critical that Gas supply be resumed to all the plants on urgent and permanent basis for them to remain viable for longer run. He said that both economic and social adverse impacts will be irreparable if current gas suspension continues, as SNGPL based plants may have to shut down their business permanently causing huge financial losses to these companies beside bank default, rendering highly trained and specialized manpower jobless etc.

He said that current situation of Pakistan’s foreign reserves doesn’t allow the country to drain hundreds of millions of dollar on importing urea, instead country can export extra urea after meeting the domestic requirements to earn the foreign reserves for country. He said that government should realize that a commodity in which we are self sufficient, why should country waste its foreign reserves on importing the same?

He said that fertilizer sector is facing undue discrimination in the country. In the recent revised gas allocation priority, Fertilizer Industry though most downgraded, is now bracketed with industry at No. 3 behind Domestic and Power sector. Yet industries in general continue to get gas while fertilizer industry is deprived of this basic raw material for producing much required urea for the agriculture sector. Even CNG sector, which is last on priority list, continue to get Gas.

On the Average, general industry received 50% gas on full load basis while fertilizer sector received less than 20% gas on 75% load basis. He strongly urged the ministry to take notice of this discriminatory treatment being faced by Fertilizer Industry.

He said that apart from SNGPL network based plants, SSGC based FFBL also remained shut down for 30 days in January and February 2013 alone due to complete closure of gas by SSGC. He said that on average FFBL faced 50% gas curtailment in just first 60 days of 2013. This may be pertinent to mention that SSGC is observing CNG holiday on its network for one day only.

Executive Director FMPAC urged the Ministry to direct SNGPL to restore gas supply to fertilizer plants on immediate basis. He said that Long Term solution for SNGPL based fertilizer plants would only be viable option if these four plants survive until March 2014. He also urged the Ministry to direct SSGC to restore full committed Gas supply to FFBL, which has been continuously facing adverse situation due to non-supply of full committed Gas. He assured full cooperation to Ministry for solving the gas crisis in the country which is badly hurting the fertilizer sector and resulting in increased prices of urea in the country.