ISLAMABAD: The government’s recent decision to allow urea import by the private sector will pave the way for undue commission on the commodity at the retail stage in the absence of an ineffective price control mechanism, a horticulture expert said on Saturday.
Ahmad Jawad, who’s served as the chairman of the Federation of Pakistan Chambers of Commerce and Industry's standing committee, criticised the recent go-ahead by the Finance Division and the Ministry of Petroleum given to the Ministry of National Food Security and Research for framing a policy that will allow urea import by the private sector.
“This move will open the door for commission agents. No private companies have the capacity to enforce a strict mechanism,” he said. “It’s obvious that importers will import urea on the existing international rates, and then they add custom duty and other taxes, dump (products) in their storage houses and then they sell (them) to the middlemen most likely after adding some profit.”
At present, the country needs six million tons of urea annually, but local manufacturers produce 4.5 million tons and the remaining 1.5 million tons are supposed to be imported by the TCP under subsidy.
“We can easily cover the demand-supply gap on the competitive rates of urea by providing cheap gas to the local manufactures after signing the 15-year long agreement of LNG import with Qatar,” Jawad said. “We should understand that local fertiliser companies have already invested billions of rupees in the country and also provided millions of jobs.”
He rejected the government’s justification that the private sector already buys diammonium phosphate and potash from the international market.
“We should understand that urea is one of the most consumed fertiliser in all the cultivating crops,” he added. “When one commodity like urea has huge demand then it’s obvious that middleman may also charge good commission on retail sale.” Jawad said fertiliser is the only sector that consumes gas for value-addition and it should be provided more gas. “The government must negotiate with the local manufactures to fix the reasonable rates on all the fertilsers to facilitate farmers so that our industrialisation could also be saved,” he said.
