The New Nation - Internet Edition

Staff Reporter

The Government yesterday re-fixed the price of Urea fertilizer to minimise the huge financial loss incurred by factories due to high price of gas, power and excessive maintenance cost.

As per the Government decision the factory point price of per ton of urea now stands at Tk 10,000 at the rate of Tk 10 per kg. And at the buffer end it is Tk 10,700 per ton and Tk 10.70 per kg. "The Government has to give Tk 47,300 per ton and Tk 47.30 per kg as subsidy to urea fertilizer despite re-fixation of the price," said Chief Adviser's Special Assistant in charge of industries, civil aviation and tourism, youth and sports ministries Mahbub Jamil yesterday at a press briefing at the Press Information Department in the city. He said the price of urea fertilizer was fixed for the last time on June 3 in 1997. Then the per ton price at factory point was Tk 4,800 while the production cost was Tk 4,652. The price at the buffer end was Tk 5,300 and the import cost was Tk 8,086.

He said the Government's total subsidy on Urea fertilizer would stand at Tk 5,405 crore for the fiscal 2008-09.

Explaining the necessity of price hike he said, in the last 11 years the price of coarse rice has increased 2.5 per cent from Tk 11 to Tk 30 per kg. But the price of urea remained the same.

From 1988-99 the urea fertilizer was sold at a lower price than that of its production cost. As a result the factories of the country are now incurring financial loss to the tune of Tk 1,010 crore, he added.

He said in the last eleven years the Government had paid subsidy of Tk 6,052.31 crore on fertilizer import.

He also said in 1997 the average import price of per ton of urea was Tk 8,086. But it is now at Tk 58,000.

He said though the price of gas, power and other factory related expenses have increased in recent years but the price of Urea remained the same.

"If the financial loss continues than the fertilizer factories might stop productions," Mahbub Jamil said adding that the outstanding gas bills of fertilizer factories maintained by Bangladesh Chemical Industries Corporation (BCISC) stand at Tk 211 crore.

Explaining the justification of increasing urea price the CA'S Special Assistant said the decision to increase urea price would help create awareness among farmers for proper use of urea and stop smuggling.

He said that this move would also reduce irrational use of urea to non-agriculture purposes.

He, however, said foreign revenue earning tea gardens and some other major factories could use urea.

Replying to a query the Mahbub Jamil said the Government has decided to set up two new fertilizer factories under public and private partnership to reduce dependence on fertilizer import.

"If the factories start operation than an additional 3 to 4 million metric tons of urea would be produced annually," he mentioned.

At present the country has 6 fertilizer factories with a target of producing 23 million metric tons of urea annually. But due to financial crisis and maintenance problems those factories could not reach the target.

Secretaries of Agriculture and Industries ministries were also present on the occasion.