Businesses gasping for ammonia gas

The supply crunch of ammonia and its price spiral deal a heavy blow to the factories reliant on ammonia, a very effective refrigerant.

The price of the cooling agent is already going through the roof for the last 11 months in line with what the authorities say ‘production shortfall’ at the government-owned fertilizer plant due to technical glitch.

Cold storages, ice cream factories and large size cooling machines used in super shops are some of the businesses rely heavily on ammonia gas for their operations.

According to sources, only Shahjalal Fertilizer Company is in operation to meet the current demand for ammonia.

Allegation had it that several officials of the fertilizer factory in collusion with a group of labour leaders are manipulating the gas supply to a number of gas dealer syndicates, revoking 50 per cent of licenses held by the cold storage owners.

The malpractice forces the owners of freezer lockers to buy gas at already twice as much as the original price from the cartels.

“Earlier, we used to buy ammonia directly from the fertilizer factory at a rate fixed by the government, but now we have to look to the dealers who charge price at their own sweet will,” said Bangladesh Cold Storage Association president Md Mosharaf Hossain.

“We have met BCIC chairman on a number of occasions, but every time he assures us of solving this problem, but to no avail.”

There are 420 cold storage and over 1200 ice factories relying on ammonia for cooling process.

In the wake of the crisis, cold storage in Munshiganj and milk factories in Sirajganj, Faridpur and in the capital’s Mirpur to buy the gas at twice the original price to keep their refrigeration system operating. 

Export-oriented fish processing industries are similarly facing serious troubles now.

The owners of cold stores and ice factories say if this situation continues, frozen food or agricultural produce worth thousands of crores of Taka might rot leading to price hike.

In addition, the ice factory owners are worried about the preservation of hilsa during the current monsoon.

Asked about it, Bangladesh Chemical Industries Corporation’s (BCIC) General Manager Manjur Reza told The Business Post Shahjalal Fertilizer Company Limited is only producing ammonia.

“We did not increase the gas price,” he said straightaway.

Echoing the same, Shahjalal Fertilizer Company Limited Managing Director Md Omar Faruq maintained that only the government has the authority to hike the ammonia price.

“We cannot do it without the government order. If dealers sell it at a high price, they will be responsible for that,” he explained.  

The fertilizer company produces around 830 tonnes of ammonia gas daily and supplies it accordingly.

As per the price set by the government, a 1000-litre ammonia gas cylinder costs Tk 40,000 including vat whereas dealers are charging as much as Tk 45,000 for the same.   

According to sources, there is a monthly demand for 6,000-7,000 cylinders with 50-kilogramme ammonia during peak season and 3,000-3,500 cylinders in off-peak seasons.

Abdul Mannan, manager, Santa Ice Factory at Tazumuddin under Bhola, said he bought a 50-kilogramme ammonia gas cylinder for Tk 6000 over a couple of weeks ago which now sells at Tk 12,000.

This is because of the dealers who are increasing the prices at their own sweet will, he said, adding that, “I am worried about how I will freeze up hilsa this monsoon”.

Asking not to be named, another ice factory owner asserted that the syndicate-based dealers are running the show behind the gas price hike.

“Last year per a 50kg cylinder was priced at Tk 4300, but recently it went up to Tk 12000 from Tk 7000,” he said.

Local farmers are tense as they have already paid an advance on freezing their agricultural produce, a failure of which will bring them a huge loss.

Last August Jamuna Fertilizer Company, the prime supplier of ammonia gas, stopped its delivery, thus exerting a pressure on the sole ammonia producer Shahjalal Fertilizer Company.