The federal cabinet has approved, on the proposal of the Economic Coordination Committee (ECC), a gas allocation plan for three fertiliser plants, transitioning them to a Mari-based standalone gas supply system to ensure the long-term sustainability of domestic fertiliser production.
According to a news report, this decision will help protect farmers from price volatility, strengthen national food security, and support overall economic stability.
Under the approved plan, new gas supplies from Ghazij/Shawal off-spec raw gas discoveries will be allocated to three fertiliser plants: Fauji Fertiliser Company (Port Qasim) will receive 104 mmcfd of raw gas (80 mmcfd processed), Fatima Fertiliser (Sheikhupura) will get 68 mmcfd of raw gas (52 mmcfd processed), and Agritech (Daudhkhel) will receive 50 mmcfd of raw gas (38 mmcfd processed).
The gas will be delivered to the Mari gas field, where fertiliser companies will set up processing and compression facilities.
To accommodate these changes, up to 110 mmcfd of gas earlier allocated from HRL to GENCO-II will be de-allocated, with up to 105 mmcfd allocated to Engro Fertiliser’s Mari plant. The required investment for processing low-BTU, high CO2 gas is estimated at over USD 200 million, which will be fully funded by the fertiliser industry.
This policy intervention addresses a major risk in the fertiliser sector. Before this decision, around 32% of domestic urea production capacity, over two million tonnes annually, faced uncertainty due to a lack of assured gas allocation. Without this move, the fertiliser sector would have relied on volatile international markets, with an estimated annual import bill of USD 2–3 billion, putting pressure on foreign exchange reserves and domestic fertiliser prices.
The new allocation system will stabilise fertiliser supply and ensure that farmers continue to access urea at prices well below international benchmarks. The policy also supports the import substitution of USD 2–3 billion annually without fiscal costs, helping conserve foreign exchange without burdening the national exchequer.
Additionally, the decision optimises national energy use by utilising low-quality gas that would otherwise remain underused, channeling it into productive fertiliser manufacturing. The fertiliser industry is also set to continue investing private capital in infrastructure, such as pipelines and processing facilities, improving plant efficiency and ensuring long-term supply security.