The Pakistani government supports the allocation of gas from the Mari Gas Field to the fertilizer industry to prevent increases in urea prices and supply disruptions. A committee led by the Petroleum Minister is evaluating a proposal for system-wide weighted average cost of gas (WACOG) to ensure stable pricing.
The local fertilizer sector, which produces nearly all of the country’s urea needs, saves the government $2.3 billion annually by avoiding imports. The Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) emphasized that the Mari Gas Field’s low BTU gas is crucial for fertilizer production and urged that this gas be supplied directly to fertilizer plants.
The industry has invested over $500 million in infrastructure to utilize this gas effectively. FMPAC warned that shifting the cost pressures of imported re-gasified liquid natural gas (RLNG) to the fertilizer sector would increase urea prices, harm farmers, and threaten food security. They proposed a bilateral arrangement for gas supply from the Mari field to ensure affordable urea prices, stable supply, and support for full capacity operations, thus reducing import dependency and fostering economic stability.
