A daily diversion of over 100 million cubic feet (mcf) of gas to different power plants forced three of the six state-run urea factories to stop production for the last four months, prompting the government to go for an all time record import of chemical fertilisers.
Such forced closures of fertiliser factories due to the gas crisis is becoming too taxing for the government that has to spend at least Tk 3,300 crore to meet the import bills, according to an official estimation.
Amid a gas crisis in power plants, the government ordered temporary shut down of Polash Urea Fertiliser Factory Ltd, and Urea Fertiliser Factory Ltd in Ghorashal in mid-March, and also Chittagong Urea Fertiliser Ltd (CUFL) on April 26.
Officials of the Bangladesh Chemical Industries Corporation (BCIC) that operates the six gas-fired urea factories see no prospect of the three shut factories resuming production anytime soon.
While the demand for power is rising, a BCIC source feared that the three factories will remain closed for another month or so at the least, continuing to hamper domestic urea output.
Of the three running factories -- Zia Fertiliser Company in Brahmanbaria, and Natural Gas Fertiliser Factory in Sylhet -- are running at their capacities but the largest -- Jamuna Fertiliser Company in Jamalpur is producing nearly one-third of the capacity, due to poor gas supply.
BCIC and the industries ministry sources said the government will have to import a record 16.5 lakh metric tons (MT) of chemical fertiliser in FY 2009-'10 to supplement the uncertain domestic production, for meeting the 29.5 lakh MT requirement officially projected for the fiscal year.
Industry sources however feared that the import target might still appear inadequate if BCIC factories continue to suffer production losses owing to the persistent gas crisis.
One BCIC official said the corporation is not being able to set a production target for the current fiscal, as nobody knows whether the shut factories will be able to resume production anytime soon.
Talking to The Daily Star, Agriculture Minister Matia Chowdhury acknowledged the need for increased urea import, and blamed the previous government's inertia in exploring new gas fields, for the current gas crisis.
She said, "We're stuck with limited options -- obviously, we have to give priority to power generation and that's why some of the fertiliser factories have to be kept out of operation."
Matia however expressed firm resolve to meet farmers' requirements of fertiliser, no matter what. "We need to spend more to import fertilisers," she said.
"If we can save money by not importing food -- growing enough locally, I don't see much problem in spending a little more for importing fertilisers," she argued.
In last year's (FY 2008-'09) budget Tk 4,285 crore was allocated as subsidy for fertilisers and other agricultural inputs, but due to abnormal price hikes of urea and non-urea fertilisers on the international market, the amount was later raised to Tk 5,785 crore.
Early this year, the prices came down by a third on the international market, and the finance minister allocated Tk 3,600 crore as subsidy for fertilisers for the current fiscal year.
The BCIC sources said the government will procure up to five lakh MT of urea from Karnaphuli Fertiliser Company Ltd (Kafco) at an international market price of $297 per metric ton, which is three times higher than what it would pay for procuring the fertiliser from state-run factories. Besides, 11.5 lakh MT more will be imported from different countries at international prices as well.