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Fertiliser Policy 2001 Of Pakistan

ARTICLE (April 19 2003) : Fertiliser Policy has been announced with effect from 1st July 2001.

  1. Policy is fixed for ten years.
    Estimated investment of US $1.2 billion in this sector in the next ten years.
  2. Basic objectives.
    Bring in new investment in this sector.
    Provision of fertilisers to farmers at reasonable prices.
    To ensure maximum possible price for gas.
    To keep fertiliser prices 20% below than import prices.
  3. In next 10 years Pakistan will need additional 2 million tons of fertilisers for local consumption.
  4. Urea production is 4.2 million tons while consumption is 4.4 million tons with estimated 6.3 million tons in next 10 years.
  5. Policy has three parts.
       Existing Fertiliser Plants.
       New Fertiliser Plants.
       Existing Plants Planning for expansion and BMR.
  6. Gas subsidy on Fertiliser will end in next five years.
  7. Pakistan offers gas to the new Plants at 70 cents as compared with 77 cents in many countries.
  8. Window for obtaining permission for new plants will be open for 4 Years only.
  9. For expansion in the existing Plants the gas prices will be the same for feed stock for five years.
  10. Second hand Plants will be allowed for import for the manufacture of fertiliser.
  11. Privatisation of Gas Companies will have not effect on gas price to new plants as these will be catered from Mari Gas Field.
  12. Duty free import of rock Phosphate to Phosphatic Fertiliser manufacture and duty-free import of raw material to NPK fertiliser producers.
  13. Tax holiday for 3-8 years for investors in this category.
  14. Guaranteed minimum price of DAP at $ 250 per tonne.
  15. New investors would enjoy 10% discount on determined prices of Gas for a period of 13 years from the date of Gas Supply Agreement (GSA), in dollar terms.
  16. The Plant, machinery and Equipment not manufactured locally will be allowed @10 percent customs duty.
  17. The charge of catalyst, chemicals lubricants and spares for the first two year operations would also be exempted from all taxes and levies.
  18. All the fertiliser producers, domestic and foreign, public and private would be treated equally in commercial, fiscal, corporate and contractual matters.
  19. To encourage local production, 10 percent duty on NPK imports would apply for a period of 5 years only, from the date of commencement of production.
  20. Selling price of fertiliser shall remain deregulated.

Sourse: Business Recorder;

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