ISLAMABAD: The Competition Commission of Pakistan (CCP) has taken stringent action against major fertiliser companies for engaging in anti-competitive conduct, imposing a total fine of Rs375 million.
The penalty includes Rs50 million on each of six leading urea manufacturers and Rs75 million on their trade association, Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC).
Investigation and Findings
The CCP initiated a detailed suo motu inquiry that revealed six major fertiliser companies—Fatima Fertiliser Limited, Fauji Fertiliser Company Limited, Fauji Fertiliser Bin Qasim Limited, Fatima Fertiliser Company Limited, Engro Fertiliser Company Limited, and Agritech Limited—coordinated with FMPAC to fix urea prices nationwide. They disguised their collusive price-fixing as an awareness campaign to influence farmers, especially during the critical Rabi and Kharif seasons.
The Commission noted that this coordinated pricing harmed farmers by artificially inflating fertiliser costs and limiting market choices. Despite their claims of price independence, the companies failed to justify the synchronized pricing strategy.
The CCP rejected their attempt to claim protection under the “state action doctrine,” emphasizing that no formal government directive authorized such collusion.
Impact and Regulatory Response
The CCP highlighted that all companies charged an identical price of Rs1,768 per urea bag, despite differences in input costs and production scales.
The bench deemed this uniform pricing a clear example of concerted behavior that undermined market competition.
Repeated warnings by the CCP in 2010, 2012, and 2014 failed to deter these anti-competitive practices. The commission’s chairman reiterated that industry associations must not facilitate price-sensitive information sharing or discussions that lead to prohibited agreements.
Recently, the CCP also fined a housing society for false advertising, signaling its commitment to curbing unfair market practices.
The CCP warned that companies entering into such prohibited agreements without prior approval could face fines of up to Rs75 million or 10 percent of their annual turnover.
