Due to the gas crisis, the production of all but one of the five fertilizer factories in the country is often disrupted. On the other hand, there is a big gap between the selling price of fertilizer and the production cost. Due to this, a large amount of fertilizer has to be imported to meet the demand. There is a major disagreement between Petrobangla and Bangladesh Chemical Industries Corporation (BCIC) over the price of gas supplied to the fertilizer factory.
In light of the current situation, the government has formed a six-member high-level committee to review and determine necessary actions regarding the supply, demand, production capacity, and subsidies related to gas in all urea fertilizer factories across the country. The committee comprises representatives from the Ministry of Agriculture, the Finance Division, the Energy Division, Petrobangla, and the Bangladesh Chemical Industries Corporation (BCIC).
Joint Secretary of the Energy and Mineral Resources Division, Md Monir Hossain Chowdhury has been appointed as the convener of the committee. Petrobangla Director (Finance) AKM Mizanur Rahman has been appointed as the member secretary of the committee.
Other members of the committee are Joint Secretary of the Finance Department Muhammad Anisur Rahman, Joint Secretary of the Ministry of Agriculture Md Khorshed Alam, Chief Financial Officer of BCIC Md Golam Faruque, and Senior Consultant of the State-Owned Enterprise Governance Scheme of the Finance Department Md Kamruzzaman.
According to Petrobangla and BCIC sources, most of the fertilizer factories in the country have been suffering from gas shortage for a long time. Especially during the season when the demand for electricity is high, the fertilizer factories often have to be closed due to lack of gas. Due to this, the government is having to import a large amount of fertilizer from abroad as the fertilizer production in the country has decreased.
According to Petrobangla sources, the daily gas requirement for all fertilizer factories across the country is 213 million cubic feet. But Petrobangla is unable to supply this amount of gas. Due to this, the factories remain closed for most of the year.
Currently, four other major factories, apart from Ghorashal Polash Fertilizer Public Limited Company, are closed due to lack of gas. The closed factories are Jamuna Fertilizer Factory, Ashuganj Fertilizer and Chemical Company Limited (AFCCL), Chittagong Urea Fertilizer Limited (CUFL), and Karnaphuli Fertilizer Company Limited (KAFCO).
Committee member secretary Petrobangla Director (Finance) AKM Mizanur Rahman told Bonik Barta that the country’s fertilizer factories will be kept operational after overcoming the gas crisis and how the price of imported LNG will affect the production cost of fertilizer will be considered. A committee has been formed with the relevant stakeholders to review how to reduce the dependence on fertilizer imports through these. The first meeting of this committee will be held tomorrow. The course of action will be determined following the meeting.
The high-level committee will assess gas supply to these fertilizer factories, evaluate the current demand for fertilizer, determine BCIC's production capacity, and set the required level of subsidies needed for fertilizer production. In addition, the committee will prepare a detailed report analyzing the economic and operational issues related to gas supply and pricing in the four BCIC factories currently closed due to gas shortage. In addition, the committee will discuss the payment of Petrobangla’s gas arrears of BDT 9.64 billion as of May this year.
According to BCIC sources, the demand for urea fertilizer in Bangladesh was 1.56 million tons in the last fiscal year. The previous year it was 1.74 million tons. In FY 2024-25, the government spent $598 million on urea imports. In FY 2023-24, it was $643 million.