KARACHI: Contrary to strong criticism by the industrial sector on the massive gas tariff hike, Engro Fertilisers Ltd has appreciated the government for removing the subsidy for manufacturers who get gas from the Sui Northern Gas Pipeline Ltd (SNGPL) network, which represents 60pc of all fertiliser manufacturing capacity.

Feedstock prices have been increased to Rs1,597 per mmBtu from Rs580 which is almost a 300pc rise in the cost of producing fertiliser.

The remaining 40pc of fertiliser manufacturing capacity that is on the Mari network, is still at the subsidised price of Rs580 per mmBtu.

The company said that Pakistan’s current financial position is distressed, it is in a debt crisis, with the debt-to-GDP ratio already above 70pc and more than $27 billion of foreign debt to be repaid by November 2024. The country cannot afford further fiscal pressures or half measures that do not go all the way in solving Pakistan’s problems.

“The dependence on government subsidies must end for Pakistan to really move forward and break away from the vicious cycle of debt,” Engro said.

The fertiliser maker urged the government to completely remove all subsidies from the fertiliser sector and with this complete removal, the government is expected to collect Rs150bn, which can then be used for targeted agricultural projects and initiatives that generate economic activity and growth in the country, Engro said.

NKATI slams gas hike

North Karachi Association of Trade and Industry (NKATI) President Faisal Moiz Khan has condemned the significant increase in gas tariffs by the caretaker government, deeming it disastrous for industries and a serious threat to the economy.

He urged the government to immediately reverse the recent hike in gas rates and to establish gas rates through consultations with stakeholders, aiming to alleviate the burden on industrial production costs.

Published in Dawn, February 21st, 2024