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ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed a fine of Rs375 million on six leading urea manufacturers and their trade association — Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) — for collusive price fixing.
The fines have been imposed in violation of Section 4 of the Competition Act 2010.
Following a suo motu inquiry initiated in 2021, the CCP found that the companies, in coordination with FMPAC, had issued a joint advertisement setting a uniform maximum retail price of Rs1,768 per 50 kg bag—despite variations in input costs, gas prices, and market conditions.
The CCP declared this a clear act of cartelisation, and not a lawful awareness campaign.
The decision was made after a four-year process that involved an initial inquiry and several hearings with the fertiliser companies.
The CCP announced that fines of Rs50m each were imposed on Engro, Fauji Fertiliser, FFBL, Fatima Fertiliser, Fatima Ltd, and Agritech, while a penalty of Rs70m was levied on FMPAC.
The commission rejected the firms’ argument that they acted under a government directive, stating no formal instruction existed.
The CCP emphasised that business associations cannot fix or recommend prices, and warned that long-standing subsidies cannot justify anti-competi-tive conduct.
Highlighting broader concerns, the CCP noted that despite the expiry of subsidised gas contracts in 2021 and deregulation under IMF reforms, price uniformity persists, which raised serious red flags about competition in the sector.
The CCP urged the federal government to review the outdated Fertiliser Policy of 2001, disengage from direct coordination with trade bodies, and allow market forces to prevail.
Audit reports
Separately, the Islamabad High Court has reserved its verdict in a CCP case seeking cost audit reports from fertiliser companies.
The companies challenged the directive, claiming confidentiality, though they submit the same data to the SECP.
The CCP cited a Supreme Court ruling (in the Dalda Foods case) affirming its legal authority to investigate and demand information.
Under the law, cartelisation can result in penalties of up to 10 per cent of turnover or Rs75m, with repeat violations attracting criminal liability.
Published in Dawn, June 4th, 2025
