BeNewz
Related Articles
Aftab Maken
ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed a cumulative penalty of Rs 375 million on six leading urea manufacturers and their trade association for collusive price fixing.
The Commission, acting on a suo motu notice, conducted a comprehensive inquiry and found that the companies — Fatima Fertilizer Limited, Fauji Fertilizer Company Limited, Fauji Fertilizer Bin Qasim Limited, Fatima Fertilizer Company Limited, Engro Fertilizer Company Limited, and Agritech Limited — coordinated through their industry group, the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), to fix prices under the pretext of an awareness campaign.
Each of the six manufacturers has been fined Rs 50 million, while FMPAC faces a penalty of Rs 75 million. The order was passed by a CCP bench comprising Dr. Kabir Ahmed Sidhu and Salman Amin.
The inquiry concluded that the companies, while publicly claiming to set prices independently, had engaged in concerted efforts to set a uniform retail price of Rs 1,768 per bag of urea. The Commission ruled this was a clear violation of Section 4 of the Competition Act, 2010, which prohibits collusive behavior.
According to the Commission’s findings, the manufacturers used a directive from the Federal Government — meant to encourage farmers through awareness on urea pricing — as a cover to engage in price fixing. “Such conduct goes beyond the bounds of lawful information dissemination and enters into the realm of anti-competitive behavior,” the order stated.
The CCP rejected the respondents’ claim of immunity under the “state action doctrine,” noting that no binding government order had mandated such coordination. Instead, the Commission observed, the manufacturers used the directive as a convenient excuse to undermine market forces and announce a uniform price in tandem.
The Bench expressed concern over the fact that despite significant variations in production costs, input prices such as gas, economies of scale, and market share, all manufacturers settled on the same price. “In a market where each undertaking’s production capacity and market share are matters of common knowledge, such a coordinated disclosure cannot be viewed as incidental or competitively benign,” the order noted. “Rather, the joint announcement constitutes an overt manifestation of concerted conduct.”
The CCP also highlighted the negative impact of this collusion on farmers, particularly during the Rabi and Kharif sowing seasons, as it distorted competition, limited market choices, and drove up costs for consumers already grappling with high agricultural input prices.
The Fertilizer Review Committee (FRC) had repeatedly urged the manufacturers to address supply issues, while the CCP had earlier warned the industry in 2010, 2012, and 2014, but to no avail. The continued disregard for competitive norms prompted the current action.
In a stern reminder, the CCP Chairman reiterated that industry associations must not serve as platforms for exchanging price-sensitive information. “Such coordination among competitors harms market dynamics and ultimately, the end consumers — in this case, the country’s farmers,” he said.
The decision sends a clear signal that the Commission intends to enforce competitive discipline in sectors critical to Pakistan’s economy, particularly those that directly affect food security and livelihoods.
