CCP Cracks Down on Fertilizer Cartel: Rs375 Million Fine Imposed

The Competition Commission of Pakistan (CCP) has imposed significant fines totalling Rs375 million on six major urea fertiliser manufacturers and their industry associations for engaging in price fixing and anti-competitive practices.

This action follows a suo motu inquiry by the CCP into the fertiliser sector.Rs375 million. Each of the six major urea manufacturers was fined Rs50 million. The companies include:

•  Fatima Fertiliser Limited
•  Fauji Fertiliser Company Limited
•  Fauji Fertiliser Bin Qasim Limited
•  Engro Fertiliser Company Limited
• Fatima Fertiliser Company Limited
• Agritech Limited

The Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC), a leading industry association, was penalised Rs 75 million. The CCP found that these companies, in coordination with FMPAC, colluded to fix urea prices across the country. This conduct was deemed a violation of Section 4 of the Competition Act, 2010, which prohibits anti-competitive behavior.

The companies allegedly used an awareness campaign as a pretext to jointly announce and maintain uniform urea prices. Despite claiming price independence, all six companies were found to be charging an identical rate of Rs1,768 per bag, regardless of variations in input costs. The CCP termed this uniformity a manifestation of concerted conduct that distorted competitive pricing mechanisms.

The companies attempted to justify their actions under the ‘state action doctrine,’ citing a government directive for price awareness. However, the CCP rejected this defense, stating there was no formal compulsion to fix prices and that the directive was misused to announce uniform rates in coordination.

The CCP’s investigation revealed that this collusive behavior not only distorted competition but also harmed farmers across Pakistan, particularly during the critical Rabi and Kharif seasons, by artificially influencing fertilizer prices and limiting market choices.

Dr. Kabir Ahmed Sidhu, a member of the CCP bench, emphasized that industry associations must not serve as platforms for sharing price-sensitive information or coordinating pricing strategies. The Commission remains committed to ensuring market competitiveness and consumer welfare.

In response to the CCP’s order, FMPAC issued a statement asserting it had no role in pricing decisions and clarified that it does not determine or coordinate the pricing of urea or any other fertilizer product. They insisted they acted in good faith to implement a government directive for a public awareness campaign regarding prevailing market prices.