FFC SHOWS RS 4.89 BN NET EARNINGS DESPITE HEAVY TAXATION.
A leading fertiliser company has shown net earnings of Rs 4.89 billion for the period ending June 30, 2016 despite imposition of three percent Super Tax, heavy taxation, GIDC, volatile market conditions and absorption of part of fertilizer subsidy. Source said to Research analyst-PAGE on Thursday that contrary to claims that urea producers are enjoying high profits, it must be taken into consideration that fertilizer plants require huge financial capital/investments for establishment; therefore their profits cannot only be judged on year to year basis. Fertilizer companies are paying more taxes, GIDC and other form of taxes to the government of Pakistan. Moreover, fertilizer gas price at $5.5 per MMBTU against average of International prices of $2.5 per MMBTU on feedstock in Pakistan pose a challenge to domestic fertilizer producers. Fauji Fertiliser Company (FFC) announced half yearly results amid unprecedented adverse market conditions.
As per fertiliser policy 2001, Clause 5.1, Selling price of fertiliser shall remain deregulated on the understanding that while manufacturers will allow free market forces to prevail. Contrary to free market principles and to benefit farmers in Pakistan, in past when imported fertiliser cost was quite high the domestic fertiliser producers were providing subsidised fertiliser to farmers of Pakistan despite the fact that international fertiliser prices were sky high. Domestically produced urea was available at Rs 1700-1800, while at the same time, the price of imported urea was in the region of Rs 2400 - 2500 and government had to provide subsidy to imported fertiliser.
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|Publication:||Pakistan & Gulf Economist|
|Date:||Aug 14, 2016|
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