Urea prices to rise on gas tariff adjustment

Urea prices are likely to increase by at least Rs100 per bag owing to the government’s commitment to the IMF to implement a semi-annual gas tariff adjustment by February 2025. In its recent report, the IMF revealed that the federal government has agreed to announce the adjusted tariff rates semi-annually to meet the revenue requirements of the Sui companies. Recently, both Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Ltd (SNGPL) submitted formal requests to the Oil and Gas Regulatory Authority (Ogra) for a gas price increase of up to 50 per cent to cover their estimated revenue needs for 2024-25. Earlier this year, the caretaker government approved a 175pc price hike for fertiliser manufacturers on the SNGPL network, leading to a urea price increase of approximately Rs900 per bag.