Fertilizer sectors profit to be linked with gas

One major event that can emerge for fertilizer sector is the gas rationalization plan which is being formulated by government to check rising gas demand in the country. Under the plan, there are proposals to abandon gas subsidies or impose a gas levy so that there should be uniform gas prices for various categories of consumer.However, the exact methodology or rate is not disclosed yet and may be finalised in few days. For this reason, we have run earnings sensitivity to feed gas prices for our clients. In all the three scenarios mentioned below, we have assigned 14% gas curtailment for Mari network while a higher gas curtailment of 27% and 40% for SSGC and SNGPL networks after incorporating the recently announced Gas Allocation Plan.