In a key decision impacting Pakistan’s fertiliser sector, the Economic Coordination Committee (ECC) has declined a proposal to extend RLNG supply for Fatima Fertilizer and Agritech until March 2026. Instead, the committee approved operations only until December 31, 2025, directing a full review of gas availability and urea stocks by December 15.
The Ministry of National Food Security had urged continued gas supply, stressing that the two SNGPL-based plants with a combined annual capacity of 900,000 tonnes play a crucial role in stabilising urea prices and maintaining steady domestic stocks. Pakistan currently has a total annual production capacity of 6.6 million tonnes, enough to meet demand if all plants run smoothly.
Officials highlighted that both plants have been operating continuously since April 2023, helping boost buffer stocks to over 300,000 tonnes per month.
“Their uninterrupted operation has kept the market stable and prevented expensive imports,” the ministry conveyed during the meeting.
Despite this, the ECC maintained its stance, noting the ongoing preparation of a separate gas allocation plan for fertiliser plants. The Petroleum Division endorsed operations only until the end of 2025, citing the need to re-evaluate RLNG arrangements before any long-term commitments.
Background data shows that domestic urea prices have dropped 8.4% since July 2024, now averaging Rs4,311 per 50kg bag, while global prices have climbed more than 14%. Imported fertiliser currently costs nearly Rs7,275 per bag, underscoring the importance of local production.
Officials warned that shutting the two plants earlier could lead to a production loss of over 400,000 tonnes, potentially causing shortages during the next Rabi and Kharif seasons as demand rises with new provincial incentives and high-yield crop varieties.
The ECC has now asked the Food Security Ministry to present a detailed nationwide supply assessment by mid-December, after which a final decision on future gas supply will be taken.