Fertiliser Policy 2001 Of Pakistan
ARTICLE (April 19 2003) : Fertiliser Policy has been announced with effect from 1st July 2001.
- Policy is fixed for ten years.
Estimated investment of US $1.2 billion in this sector in the next ten years.
- 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.
- In next 10 years Pakistan will need additional 2 million tons of fertilisers for local consumption.
- Urea production is 4.2 million tons while consumption is 4.4 million tons with estimated 6.3 million tons in next 10 years.
- Policy has three parts.
Existing Fertiliser Plants.
New Fertiliser Plants.
Existing Plants Planning for expansion and BMR.
- Gas subsidy on Fertiliser will end in next five years.
- Pakistan offers gas to the new Plants at 70 cents as compared with 77 cents in many countries.
- Window for obtaining permission for new plants will be open for 4 Years only.
- For expansion in the existing Plants the gas prices will be the same for feed stock for five years.
- Second hand Plants will be allowed for import for the manufacture of
- Privatisation of Gas Companies will have not effect on gas price to new plants as these will be catered from Mari Gas Field.
- Duty free import of rock Phosphate to Phosphatic Fertiliser manufacture and duty-free import of raw material to NPK fertiliser producers.
- Tax holiday for 3-8 years for investors in this category.
- Guaranteed minimum price of DAP at $ 250 per tonne.
- 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.
- The Plant, machinery and Equipment not manufactured locally will be allowed @10 percent customs duty.
- The charge of catalyst, chemicals lubricants and spares for the first two year operations would also be exempted from all taxes and levies.
- All the fertiliser producers, domestic and foreign, public and private would be treated equally in commercial, fiscal, corporate and contractual matters.
- 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.
- Selling price of fertiliser shall remain deregulated.