ISLAMABAD: Commerce, Industries and Production Adviser Abdul Razak Dawood on Tuesday hinted that the prices of fertiliser could rise by Rs100 per bag due to increase in the gas rates.

Addressing a press conference, the adviser said the fertiliser sector had demanded an increase of Rs200 per bag but this was not acceptable to the government.

“We had a meeting with the fertiliser manufacturers before the budget and it was decided that they will not unilaterally increase the prices, since the gas prices have been increased in the budget while the cabinet on Tuesday decreased the Gas Infrastructure Development Charges (GIDC),” Dawood said, adding we will work over the prices on Wednesday and the meeting with fertiliser industry is scheduled on Thursday.”

He said that the gas rates for feedstock and for the fuel have been increased and the industry has demanded an increase of Rs200 per bag, “but the final decision will be made in the meeting with them.”

The adviser said that the government was compelled to maintain the fertiliser prices at reasonable rates as higher rates could lead to a negative impact on the agriculture sector.

At the same time he turned down the idea of giving subsidy to the fertiliser sector, as it was part of the deal with IMF.

“We cannot take fertiliser as a stand-alone case and if subsidy was given to one sector others will demand the same,” he added.

The adviser said that there were adequate stocks in the country and he informed that during the past six months 3.2 million tonnes fertiliser was produced in the country and the demand was 2.9m tonnes.

“Besides the government is set to import 100,000 tonne urea due to some pervious decision,” Mr Dawood added, “There is no shortage of stock in the market chain.”

Responding to a query over resentments against harsh measures by the government, he added, that the government was taking the business community into confidence.

“The prime minister is going to Karachi tomorrow (Wednesday) and hold meeting with them, but the issue is that nobody in Pakistan including the manufactures, traders, retailers anybody want to pay taxes,” the advisor said.

He added that the condition has deteriorated very much, adding, “We all agree that there is need to collect taxes from all relevant quarters as the tax to GDP ratio is too low in the country, however we may differ over the speed of reforms we are initiating.”

Published in Dawn, July 10th, 2019