Halfway through a knee-jerk | Pakistan Today

Halfway through a knee-jerk

The country’s agrarian economy might be bracing for a fresh setback as the Sui Northern Gas Pipelines Limited (SNGPL) is going to discontinue gas supply to the Engro Fertilizer Limited (EFL), a major urea producer in Pakistan. The SNGPL has informed the EFL, a 100 percent subsidiary of Engro Corporation, that the gas supply to it would be discontinued. Citing curtailed supplies from some of its gas fields the SNGPL announced that the fertilizer giant would get no gas for its new fertilizer plant.
“As a consequence of curtailed supply from some gas fields due to sabotage activity and other reasons and in order to manage the demand-supply position they (SNGPL) are discontinuing gas supply to the new fertilizer plant of Engro Fertilizer,” Andalib Alavi, company secretary of Engro Corporation, on Friday shared with the company’s shareholders at country’s three stocks exchanges in Karachi, Lahore and Islamabad. However, the market analysts see no knee-jerk impact on the prices of agriculture input, fertilizer, saying the current gas curtailment was of operational and short-term nature. “(It) therefore has been implemented to manage the demand-supply position on the SNGPL network,” said Hasan Raza, research analyst at InvestCap.
“Thus, we deem it once again a short-term operational phenomenon that is expected to be restored soon,” added the analyst. Raza said no downward reversion in fertilizer prices was expected now because of the ongoing gas curtailment issues, as opposed to earlier expectations of downward price revision amid sufficient availability of urea in the market. The FFC and FFBL, the analyst said, would be the major beneficiaries due to continued supplies to their fertilizer plants. “There are no gas supply disruptions to their plants currently,” said Raza.

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