ECC orders gas for two urea plants.

ISLAMABAD -- Amid persistent dearth of foreign exchange, the Economic Coordination Committee (ECC) of the Cabinet on Wednesday decided to provide indigenous gas to two Punjab-based fertiliser plants to meet a 300,000-tonne gap of urea fertiliser through domestic production for the upcoming Kharif season instead of imports.

The single-point meeting of the ECC presided over by Finance Minister Ishaq Dar directed the Petroleum Division to ensure supply of local gas to two fertiliser plants on Sui Northern Gas Pipelines Ltd (SNGPL) network - Fatima Fertiliser, Sheikhupura and Agritech, Mianwali - immediately for bridging the gap between demand and supply of urea fertiliser for Kharif season, beginning April 1.

The revival of two plants would require about 70 million cubic feet of gas per day (mmcfd). It was not immediately clear from where the local gas would be diverted to the fertiliser units but informed sources said the power sector could suffer gas supply cuts with a possible increase in fuel price adjustments in power tariff.

The government discontinued the LNG supply to the two fertiliser plants on Jan 3 as part of the reduction in untargeted subsidies under the IMF programme.

Import option to meet Kharif demand not feasible due to forex shortages

The ECC was informed a day earlier that gas subsidy for the export industry was budgeted at Rs40bn for the current fiscal year but there were other pending claims of over Rs26 billion against subsidised LNG supply to these two plants.

The meeting was told that a Fertiliser Review Committee (FRC) led by the secretary of industries and production and comprising relevant ministries, representatives from all the provinces and fertiliser companies last week had projected total urea...