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CCP Slaps Rs375m Fine on Fertiliser Firms for Price Fixing
CCP fines 6 major urea manufacturers & FMPAC Rs375m for collusion & price fixing. Farmers harmed during Rabi & Kharif seasons.
ND
by News Desk
2025-06-03
CCP Slaps Rs375m Fine on Fertiliser Firms for Price Fixing

The Competition Commission of Pakistan (CCP) has imposed a total fine of Rs375 million on six leading urea manufacturing companies and their trade association, Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC), for engaging in anti-competitive behaviour and collusive price fixing.

According to a press release issued by the CCP on Tuesday, each of the six companies — Fatima Fertiliser Limited, Fauji Fertiliser Company Limited, Fauji Fertiliser Bin Qasim Limited, Fatima Fertiliser Company Limited, Engro Fertiliser Company Limited, and Agritech Limited — was fined Rs50 million, while FMPAC was penalised Rs75 million.

The decision follows a suo motu inquiry by the CCP, which concluded that the companies, under the guise of conducting a urea pricing “awareness campaign”, jointly announced a uniform price across the country — Rs1,768 per bag — despite differing costs of production, gas prices, and market conditions.

“The coordinated price-setting goes beyond lawful information sharing and constitutes a violation of Section 4 of the Competition Act, 2010,” the CCP bench — comprising Dr Kabir Ahmed Sidhu and Mr Salam Amin — stated.

The Commission’s investigation highlighted that this collusive behaviour distorted market competition, limiting choices for farmers and artificially increasing urea prices, particularly during the critical Rabi and Kharif crop seasons.

The companies’ defense — invoking the “state action doctrine” by claiming compliance with a government directive — was rejected by the CCP. The Commission found no formal government order compelling uniform pricing and observed that the campaign was misused to mask coordinated pricing.

“It is of particular concern that all respondents charged the same price for urea despite significant differences in production capacity, gas prices, and market conditions,” the CCP said. This, it added, demonstrated clear intent to undermine market forces and create an artificial pricing regime.

The Commission also criticised the repeated failure of these companies to address supply imbalances, noting that multiple warnings — issued in 2010, 2012, and 2014 — had not resulted in meaningful reforms.

The ruling sends a clear message: industry associations must not be used as platforms for sharing sensitive price information. CCP Chairman Dr Kabir Ahmed Sidhu reiterated that firms violating the law face penalties of up to Rs75 million or 10% of their annual turnover.

This action follows the CCP’s recent fine against a housing society for misleading advertising, underlining its active enforcement of fair market practices.

The CCP’s firm stance aims to restore competition, transparency, and fairness in markets crucial to Pakistan’s economy and agricultural backbone.

 
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