ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has allowed export of additional 150,000 tons of sugar and approved release of Rs10 billion budgeted subsidy of Petroleum Division and Rs50 billion government’s guarantee to PSO to ensure supply of LNG chain.
The ECC meeting presided over by Finance Minister Ishaq Dar was put up a summary by the Petroleum Division on liquidity requirement of PSO for import of LNG and petroleum products in the country.
The Petroleum Division in order to enable PSO to remain afloat in its payment obligations to LNG suppliers, as well as, to avoid any threat towards breakdown of LNG supply chain submitted proposals to the ECC that; (i) balance of Rs18.75 billion available under the head of subsidy to domestic consumers through SNGPL (RLNG) in the budget of Petroleum Division may be released in one go to SNGPL against its outstanding claims of LNG diversion of Rs109 billion; (ii) Rs100 billion may be provided as supplementary grant under the head of subsidy to domestic consumers through SNGPL (RLNG) for meeting SNGPL’s accumulated and anticipated LNG diversion cost to domestic consumers; (iii) Ogra may determine and notify the RLNG sale price under Section 43B of the Ogra Ordinance, 2002 based on the prevalent guidelines issued by the government from time to time on sale price of RLNG for the RING consumers of SSGCL, SNGPL and PLL; (iv) for the recovery of the balance cost of LNG diversion arising out of proposal In (I) and (ii) above, and similar recurring cost In future, OGRA may include the cost of LNG diversion in the annual determination of estimated revenue requirement (ERR) as well as in the review of estimated revenue requirement (RERR) of the gas companies.
The meeting was informed that PSO has been engaged in import of LNG in the country to meet the deficit in gas demand and supply and is obliged to clear its financial obligations of supplier within stipulated period. In order to enable PSO to remain current in its payment obligations to LNG suppliers, as well as, to maintain LNG supply chain, the ECC allowed release of Rs10 billion budgeted subsidy to the Petroleum Division and allowed government guarantee against bank financing up to Rs50 billion.
On a summary moved by the Ministry of National Food Security and Research for export of sugar during the year 2022-23, the ECC after detailed discussions on the recommendation of the SAB, allowed 250,000 tons of sugar for export inclusive of previous permitted 100,000 tons by the ECC on first come first basis. The ECC in the summary was presented the recommendations of 4th meeting of Sugar Advisory Board (SAB).
Ministry directed to convene meeting of SAB for taking decision on sugar exports
The meeting also decided that the total quantity of export may be distributed among provinces based on their installed crushing capacity to be determined by PSMA. The ECC further decided that dollar proceeds of exports will be recovered with 60 days of LC opening. The Ministry of National Health Services, Regulation and Coordination submitted a summary regarding transfer of amount to government of Afghanistan for functioning, maintenance, equipments and salaries of three Pakistani hospitals in Afghanistan.
The ECC after discussion approved the revised mechanism, modalities for transfer of funds to Afghanistan as proposed by the Afghanistan Inter-Ministerial Coordination Cell (AICC) with direction to attempt to release the amount in Pak rupees.
As per revised mechanism, the total amount already approved by the cabinet for salaries –Rs1.009 billion – would be transferred to Afghanistan in four tranches and the first tranche to be transferred by Ministry of Finance to Ministry of NHSR&C account. These funds would be transferred through MoFA and sent to Pakistan Embassy Kabul. The remaining three tranches would be transferred through banking channels to the Embassy account opened for the purpose of disbursement of salaries for doctors and other staff working in hospitals in Afghanistan constructed and operated by Pakistan.
Petroleum Division presented a summary for extended well testing (EWT) over Wali-1 Discovery Wali (E.L) and submitted that an exploration license was granted over Wali Block to Oil and Gas Company Limited (OGDCL) and company drilled an exploration well named Wali-1 and made a gas condensate discovery in Lockhart Hangu and Kawagarh Formations. Extended well testing is a technical requirement to appraise the said discovery over Wali-1 exploration well drilled in Wali Block.
The ECC after discussion allowed one-year EWT over the said discovery from start of production under EWT arrangements with condition that OGDCL will submit Declaration of Commerciality (DoC) and Field Development Plan (FDP) over the Wali-1 discovery before expiry of allowed EWT period.
The Ministry of Industry and Production submitted a summary on diversion of RLNG to urea fertiliser plants up to 31st January 2023. The ECC after deliberation decided to reject the proposal of Ministry of NFS&R and Ministry of industries and production and decided that the RLNG supply to these plants would be discontinued with effect from midnight of 3rd January 2023.
The ECC deferred a summary submitted by Ministry of Industries and Production tabled on price fixation of imported urea with direction to work out and submit detailed mechanism of sharing of subsidy by provincial governments.
The meeting was attended by Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for National food Security and Research Tariq Bashir Cheema, Shahid Khaqan Abbasi MNA/Ex-PM, Minister of State for Petroleum Musadik Malik, SAPM on Finance Tariq Bajwa, SAPM on Government Effectiveness Muhammad Jehanzeb Khan, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal, federal secretaries, senior officers.
Copyright Business Recorder, 2023
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