The country's total urea production capacity is approximately 7 million metric ton out of which 6.3 million metric ton is based on Fertilizer Policy 2001 gas and imported LNG, while 0.7 million metric tons is based on Petroleum Policy 2012, the pricing of which is 56 percent higher than the Fertilizer Policy 2001 rates. The domestic urea industry production, under Fertilizer Policy 2001, is sufficient to meet the local demand of 5.9 million metric tons annually.
Currently, the international urea price is approximately $290 per metric tons and if country decides to export 0.7 million tons of urea based on petroleum policy 2012, Pakistan can earn approximately $ 200 million annually. Earlier in 2017 and 2018, Pakistan had exported some 650,000 metric tons urea and earned foreign exchange amounted to $ 160 million for the country.
Industry sources said that the government should push and support the fertilizer sector for exploring avenues of exporting urea in the international market to earn much needed precious foreign exchange for the country. They informed that since March this year all fertilizer plants are getting required gas, of which the carryover stocks for August 2019 were 330,000 metric tons including 100,000 tons of recently imported commodity.
This improved gas supply presents an opportunity for the government to consider the export of urea manufactured on Petroleum Policy 2012 as this will not only bring demand supply balance in the local market but also help to reduce the trade deficit of the country.
The Fertilizer Policy introduced in 2001, was designed to improve farmer economics by ensuring that the local fertilizer prices were lower than imported fertilizers. While, the policy demands that fertilizer industry operates under this pricing regime, certain manufactures in the industry are receiving part of their gas requirement at Petroleum Policy 2012, the pricing of which is 56 percent higher than the Fertilizer Policy rates.