KARACHI, Nov 2: Engro Corporation announced on Wednesday that it had rolled back the urea price to the previous level “as a gesture of goodwill”.

But the development came after the government sent Excise officials to the company’s plant on Tuesday, who said they had “verbal orders” not to let a bag leave the plant.

In a mixture of politics and economics, the Engro management and the government are trying to outwit the other. First, on Oct 30, Engro said it was raising prices of urea by a massive Rs400 per bag (inclusive of GST), which was enough to make a weak hearted farmer faint, for few could afford urea for the upcoming Rabi’s wheat sowing season at the new price of Rs1,980 per bag of 50kgs.

The government sent in their well-known and much feared trouble shooters--the Excise department officials-- to bring the private sector owned company in check.

Discussions between the company and the ministry may have made each realise that the tussle would serve neither. Details of the discussion are not known but the company may have pointed to a possible contempt of court on the part of petroleum ministry, which did not act upon the verdict passed by the Sindh High Court in favour of Engro, asking the government to provide gas supply of 100mmfcd as per agreement with the company.

Oil and gas analysts contend that the government does not have the gas to feed entire contracted supply to Engro plant and the pipes would, anyway, run dry in the upcoming winter, until March.

Engro announced at the KSE on Wednesday that the government had withdrawn the officials of the Excise department from Engro Fertilisers Limited and shipments of urea were proceeding normally from the plant.

The company said: “The government and the company have had discussions over the matter yesterday wherein it has been agreed that the government will work towards implementing a long-term and sustainable strategy for provision of gas to the company. Consequently, as a gesture of goodwill, the company has rolled back its latest price increase announced on Oct 20, 2011.”

If the huge price hike of 25 per cent was the company’s way of drawing the government’s attention to the Engro woes, the trick worked following which the company reverted to the earlier price of Rs1,580 per bag. But the Engro notice does not say when or how much gas is likely to be made available by the government to its new plant, EnVen, which essentially leaves the issue unresolved.