NFML : Dealers’ margin: ECC to approve Rs 40 on each 50kg urea bag

NFML : Dealers’ margin: ECC to approve Rs 40 on each 50kg urea bag

Economic Co-ordination Committee (ECC) of the Cabinet on July 5, 2014 will approve Rs 40 per 50kg urea bag as dealers’ margin on imported urea being sold by the National Fertilizer Marketing Limited (NFML) through its dealers’ network across the country.

Official documents available with Business Recorder showed that the Ministry of Industry and Production submitted a summary to ECC on May 7, 2014 with the proposal to decrease the price of existing stock of 263,000 MT by Rs 50 kg per bag as one time special dispensation. In response ECC directed this Ministry “to work out average cost on transportation of 50kg urea bag from the warehouses of the NFML to dealer’s place and bring up a fresh summary on the issue for consideration of the ECC in its next meeting”.

According to the documents, consultations were made with relevant stakeholders to ascertain the cost of transportation from warehouses to the dealer outlets, ie, NFML, Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) and All Pakistan Fertilizer Dealers Association (APFDA) with the request to provide their inputs.

On the basis of transportation cost provided by the stakeholders, MoI&P has calculated Rs 18.33/50 kg bag as average cost of transportation. The summary was circulated among Ministries of Finance, Commerce and National Food Security & Research. Ministry of Commerce supported and suggested to revisit the quantum of incidental charges as these include dealer’s margin. Accordingly, NFML indicated that dealer’s margin, administrative, warehouse cost etc are charged at the rate of Rs 21 which was fixed in 2008 and claimed that cost of transportation from NFML to dealers cannot be adjusted in the already mentioned incidental charges. Moreover, Ministry of National Food Security & Research has supported the summary.

Informed sources told this scribe that hectic efforts are being made by the Ministry of National Food Security & Research to get the administrative control of NFML from the Ministry of Industries and Production. NFML is considered a corrupt organisation with a number of cases under investigation by the National Accountability Bureau (NAB) and Federal Investigation Agency (FIA).

The sources said, NFML is allegedly being controlled by a mafia of transporters, some of whom are facing short supply of urea, hence inflicting massive financial loss to the national exchequer. A case is also under investigation against Sindh Goods. Some of the transporters who were disallowed to participate in pre-qualification got stay orders from the civil court.