The Competition Commission of Pakistan (CCP) has recommended action against four urea producers and the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) on allegations of price fixing. The investigation into the charges began in November 2021 when the companies and the FMPAC published new prices for urea at Rs1,750/50-kg bag (US$6.34/50-kg bag) from Rs1,518-1,520/50-kg bag.
According to a July 12 statement issued by the CCP, complaints were raised when Fauji Fertilizer, Engro Fertilizers, Fatima Fertilizer, and Agritech issued their urea price lists with each showing a similar price increase. The CCP statement said variations in cost structures and subsidies for the four companies were sufficiently different that the uniformity in the price increases were suspicious. The FMPAC was included in the charges when it published the prices.
Fauji dominates the market with a 39% share, followed by Engro at 36%. Fatima Fertilizer has a market share of 13% and Agritech accounts for 4%. The CCP noted that because of the price increase, Fauji, Fatima, and Engro saw significant profits for 2021, which the agency said came at the expense of farmers and consumers. The maximum penalty allowed under the Competition Act of 2010 that established the CCP is Rs75 million (US$272,000), or 10% of the annual turnover.