KARACHI: After the federal government’s announcement of Rs36 billion subsidies on urea, the prices of local fertiliser will decreased by 20 per cent or Rs 390 per bag.
Engro Fertilizers CEO Ruhail Mohammed, while talking to media, said that out of the total price cut, Rs50 is being borne by the manufacturers, whereas the remaining will come from reduction in GST (General Sales Tax) and subsidy from the government.
The government has proposed Rs36 billion subsidies on urea, cut in sales tax to five percent from the current 17 percent and a cap in gas tariff in the budget for the fiscal year 2016/17. The move is likely to result in fertiliser prices plunging from the current Rs1,800/bag to Rs1,410/bag by the start of the next fiscal year.
The government, in the Finance Bill for the next fiscal year, proposed that urea fertiliser price be brought down to Rs1,400/bag, from Rs1,800/bag, and DAP from Rs2,800 to Rs2,500/bag to help ease financial pressure on farmers wrought by persistently low agriculture growth.
