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State-run fertiliser factories have urged the government to ensure a steady supply of natural gas alongside a proposed tariff increase, warning that domestic production will remain constrained without adequate fuel.
Fertiliser production costs at state-owned plants could be 32.6-percent lower than import prices if gas is supplied at Tk 30 per cubic metre and annual production reaches around 2.0 million tonnes, the Bangladesh Chemical Industries Corporation (BCIC) said on Monday.
BCIC Director (Planning and Implementation) Delwar Hossain made the statement during a public hearing at the BIAM auditorium in the capital, convened by the Bangladesh Energy Regulatory Commission (BERC) to discuss a sharp rise in gas tariffs for government-owned fertiliser plants.
State-owned oil, gas, and mineral corporation Petrobangla, along with its subsidiary gas marketing and distribution companies, proposed a 150 per cent hike in natural gas prices for fertiliser factories -- from Tk 16 to Tk 40 per cubic metre.
Petrobangla said the increase is needed to finance additional liquefied natural gas (LNG) imports to ensure uninterrupted gas supply to the factories.
"The country requires around 3.0 to 3.2 million tonnes of urea fertiliser annually, but due to gas shortages, 1.6 to 2.1 million tonnes must be imported," Mr Hossain said. "If gas is priced at Tk 30 per cubic metre and we can produce 2.0 million tonnes, the production cost would be Tk 46 per kilogram, compared to Tk 61 per kg for imported urea."
He emphasised that gas supply must increase alongside any tariff hike to boost production.
In 2022, BERC raised the gas price for fertiliser factories by 259.55 per cent to Tk 16 per cubic metre, but supply did not improve, he noted.
As of June 2025, fertiliser factories owed around Tk 10.39 billion to gas distribution companies.
Deputy Secretary of the Ministry of Agriculture Md Moniruzzaman assured that farmers would not face higher fertiliser costs, as there is no proposal to raise retail prices.
Currently, urea production costs Tk 38 per kg, BCIC sells it to dealers at Tk 25 per kg, and dealers sell at Tk 27 per kg. The government provides a Tk 13 per kg subsidy to cover the trade gap.
Production disruptions have been severe in recent years. During FY 2024-25, only Ghorashal Polash Fertilizer PLC operated near full capacity. Jamuna Fertilizer Company Limited remained shut for 361 days, and Chattogram Urea Fertilizer Company Limited for 273 days.
Ashuganj Fertilizer and Chemical Company operated at just 3.75 per cent of its capacity, with overall gas supply declining compared to the previous year, BCIC reported.
Petrobangla said the tariff hike would allow it to supply 250 million cubic feet per day (mmcfd) during peak fertiliser production (October-March), 165 mmcfd in April-May, 175 mmcfd in June, and 130 mmcfd from July-September.
The increase would also enable the state-owned company to raise annual LNG imports to 115 cargoes, up 6.48 per cent from the current 108.
BERC Chairman Jalal Ahmed, in his closing remarks, said the commission would carefully consider all aspects of the gas pricing issue. Stakeholders can submit written opinions on the proposed tariff hike to BERC by October 13.
azizjst@yahoo.com