ISLAMABAD, June 3, 2025 : The Competition Commission of Pakistan has taken decisive action against anti-competitive conduct in the fertilizer sector, imposing a penalty of PKR 50 million on each of the six major Urea Manufacturers, and also a penalty of PKR 75 million on a leading industry association/FMPAC, totaling PKR 375 million in fines.
Following a detailed inquiry initiated suo motu, the Commission’s Bench comprising Dr. Kabir Ahmed Sidhu and Mr. Salam Amin concluded that six urea manufacturing companies, i.e. M/s Fatima Fertilizer Limited, M/s Fauji Fertilizer Company Limited, M/s Fauji Fertilizer Bin Qasim Limited, M/s Fatima Fertilizer Company Limited , M/s Engro Fertilizer Company Limited and M/s Agritech Limited in coordination with their trade association, FMPAC, “under the guise of conducting an awareness campaign/advertisement, have effectively fixed the price of urea across the country. Such conduct goes beyond the bounds of lawful information dissemination and enters into the realm of anti-competitive behavior” in violation of Section 4 of the Competition Act, 2010.
Despite claiming price independence, the manufacturers failed to justify their synchronized pricing strategy. The Commission’s investigation uncovered that the conduct not only distorted competition, but also harmed farmers across Pakistan, especially during the critical Rabi and Kharif season, by artificially influencing fertilizer prices and limiting market choice.
The Respondents’ attempt to claim protection under the ‘state action doctrine’ was also rejected. The Bench held that no formal government directive or compulsion existed to justify their collusive behavior.
Instead the Respondents took advantage of a Federal Government direction regarding initiating an awareness campaign encouraging farmers regarding urea price and used it as a tool to fix the price in due coordination among themselves and jointly announced the uniform price for the urea buyers/consumers.
The Bench also held that such “actions, under the pretext of complying with government instructions, effectively undermined market forces and distorted competitive pricing mechanisms.”
It was also noted with great concern that despite significant variations in input costs, different economies of scales, size of the market, different prices of gas etcetera, all Respondents were charging an identical price for size of urea bag (i.e. Rs. 1768/- per bag). The Bench also noted that “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. Rather, the joint announcement constitutes an overt manifestation of concerted conduct.” Moreover, repeated directions from the Fertilizer Review Committee (FRC) were given to the Respondents to address their failure to manage supply imbalances.
Previously as well, warnings were issued by the Commission to the Fertilizer Manufacturers and FMPAC in the years 2010, 2012 and 2014 which failed to produce any lasting change.
The Chairman reiterated Commission’s message that associations across the country should not provide platform for sharing price sensitive information or exchange of views on prices.
CCP’s Order on Urea Price Advertisement
The Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) issues the following clarification in response to the order issued by the Competition Commission of Pakistan (CCP) dated 2 June 2025. This order pertains to an advertisement disseminated in November 2021.
FMPAC Had No Role in Pricing Decisions
FMPAC affirms unequivocally that it neither determines nor coordinates the pricing of urea or any other fertilizer product. As a non-commercial advisory body, the Council has never engaged in price-setting activities. Any implication that FMPAC initiated, fixed, or announced a maximum retail price is factually inaccurate and misleading.
Advertisement Was Issued Pursuant to Federal Government Instructions
The advertisement under question was published in strict compliance with a formal directive from the Federal Government. This instruction was communicated through the Fertilizer Review Committee (FRC), a statutory body established under the Fertilizer Policy of 2001, chaired by the Federal Minister for Industries and Production.
At its meeting on 25 November 2021—convened amidst rising concerns over market manipulation and hoarding of urea—the FRC resolved to initiate a public awareness campaign. FMPAC was expressly tasked with disseminating the prevailing market price of urea, a price that had already been acknowledged and recorded during the proceedings. This measure aimed to safeguard farmers from exploitative pricing practices by unauthorized dealers.
FMPAC acted in good faith to implement this directive and had no involvement in the determination or proposal of the price published in the advertisement.
Objective: Transparency and Protection of Farmers
The sole objective of the said advertisement was to promote transparency and protect the interests of farmers during a time of market distortion. It did not emanate from FMPAC’s independent initiative, nor was it intended to influence or distort market dynamics. The advertisement aligned with government policy and was consistent with FMPAC’s function as a sectoral coordination body.
FMPAC to Challenge CCP’s Order
FMPAC respectfully contests the CCP’s interpretation and intends to seek appropriate legal recourse through the designated appellate mechanisms. The Council is confident that a comprehensive and impartial review will affirm its conduct as lawful, transparent, and in alignment with public interest.