CCP Investigates Fertilizer Manufacturers for Collusive Pricing in Pakistan

Islamabad: The Competition Commission of Pakistan (CCP) has initiated hearings into alleged collusive pricing activities among the country’s leading fertilizer manufacturers. This action follows the issuance of show cause notices to the Fertilizer Manufactures of Pakistan Advisory Council (FMPAC) and its six member companies, accused of setting a uniform maximum retail price for urea which potentially violates national competition laws.

According to Competition Commission of Pakistan, the investigation was spurred by an advertisement published by FMPAC in November 2021, which declared a standardized retail price for urea during a time of escalating prices and reported shortages. The inquiry revealed a concerning pattern of uniform pricing across various districts, disregarding the diverse cost structures that should affect pricing due to different rates of feedstock or fuelstock input gas used in production.

The CCP’s findings suggest that the advertisement and the price settings it announced might constitute a breach of Section 4 of the Competition Act, 2010, particularly as it represents a decision by an association on price fixation an activity strictly outside the bounds of permissible business practices under the Act. The ongoing hearings aim to address these concerns and ensure compliance with national competition standards.

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