KARACHI: The government has reduced the urea prices to Rs1,769 per 50 kg bag from the existing Rs1,900-2,000 till July 7.

Provinces and federal agencies are allowed to add an allowance to the notified prices for extra transportation costs in remote or distant areas as per the notification.

Sunny Kumar of Topline Securities said the concerned producers, dealers or importers are given an opportunity to offer their view and justification along with submission of relevant documents, data and information by May 27 on the recent increase in prices by fertiliser manufacturers.

He said Fauji Fertiliser, Agritech, Fatima Fertiliser increased urea prices by Rs165 per bag whereas Engro Fertiliser raised rates by Rs249 since March due to inflationary impact.

As per the notification, the government observed that recent price increase of urea was totally unjustified and without any valid reason and can adversely affect the farmers and urea application in ongoing kharif season.

Mr Kumar believed that the industry is likely to provide justification to government of hike in urea prices and may challenge the said SRO in the court of law. “The manufacturers can say that government should not interfere in free market where price is determined by supply and demand situation and they have passed on inflationary impact to urea prices,” he added.

He said local urea prices are 70-80 per cent cheaper than international prices which can lead to more smuggling and shortage of urea in domestic market hence maintaining local prices at current levels may not be sustainable.

According to Sherman Research, the price notice is in accordance with the Price Control and Prevention of Profiteering and Hording Act 1977. The SRO further states that immediate action is based on current scenario which demands national emergency as per order 2021.

Published in Dawn, May 26th, 2022