ISLAMABAD: The Competition Commission of Pakistan (CCP) has taken decisive action against collusive practices in the fertilizer sector, imposing fines totaling PKR 375 million. Six major urea manufacturers have each been fined PKR 50 million, while an industry association, the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), has been fined PKR 75 million.
The action follows a suo motu inquiry by a CCP bench comprising Dr. Kabir Ahmed Sidhu and Mr. Salam Amin, which found that six companies, Fatima Fertilizer Limited, Fauji Fertilizer Company Limited, Fauji Fertilizer Bin Qasim Limited, Engro Fertilizer Company Limited, Agritech Limited, and Fatima Fertilizer Company Limited—colluded with FMPAC to fix the price of urea under the guise of an awareness campaign.
According to the CCP, the campaign amounted to price-fixing, in violation of Section 4 of the Competition Act, 2010. “Such conduct goes beyond lawful information dissemination and enters the realm of anti-competitive behavior,” the Commission stated in its decision.
Although the companies claimed to have set prices independently, the CCP found that they failed to justify their synchronized pricing strategy. The investigation revealed that this coordination distorted competition, harmed farmers, and restricted market choice, particularly during the crucial Rabi and Kharif seasons.
The respondents also attempted to invoke the state action doctrine, arguing that they were following a government directive. However, the Commission found no formal government instruction to justify their actions. Instead, the companies used a government recommendation to raise farmer awareness about urea prices as a pretext to coordinate and fix prices.
“It is of particular concern,” the Commission noted, “that despite differences in input costs, market scale, and gas prices, all respondents charged an identical price of Rs. 1,768 per bag.” The joint announcement of prices, the CCP concluded, was “an overt manifestation of concerted conduct.”
The Commission also highlighted that previous warnings issued to fertilizer manufacturers and FMPAC in 2010, 2012, and 2014 had failed to deter such behavior.
In a final note, the CCP Chairman reiterated the Commission’s warning to trade associations across Pakistan: “Associations must not serve as platforms for sharing price-sensitive information or facilitating discussions on pricing.”
