ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved retrenchment plan for over 9,000 employees of the Pakistan Steel Mills (PSM) and set up a body to explore various call options for oil hedging.
The meeting of the ECC presided over by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh on Wednesday decided to move ahead to a "full and final" human resource rationalisation plan for the PSM employees in accordance with the judgments and observations of the Supreme Court of Pakistan and other courts hearing the cases involving the PSM.
An official said that the plan involved around 9,300 employees.
The meeting also discussed the reported shortage of petrol in some cities and directed the Ministry of Energy, the Competition Commission of Pakistan (CCP) and the Oil and Gas Regulatory Authority (OGRA) to ensure requisite stocks were maintained by the OMCs and the supply to fuel stations across the country was regular and intact throughout the month, said Finance Ministry.
On Ministry of Energy proposal for hedging of petroleum prices, the ECC, after a detailed discussion to set up a committee headed by Special Assistant to Prime Minister for Petroleum Nadeem Babar with representation from the State Bank of Pakistan (SBP), the Pakistan State Oil (PSO), the Finance Division, the Petroleum Division, the Law Division, and the Planning Division.
The committee would explore call option for 15 million barrels of oil for one or two years divided into 12 equal monthly amounts for different stock prices above current Brent as long as fee is within "acceptable" range.
The proposal, according to Finance Ministry, was prepared by the Ministry of Energy in consultation with various international institutions and local partners for hedging prices for petroleum products being imported.
The meeting also decided that the terms of reference (TORs) can be readjusted by the committee in the light of future developments, and the PSO would act as the counterparty, while the Ministry of Finance shall give a guarantee of performance by the PSO.
The ECC also decided that the OGRA would also be given the policy direction to include the monthly price of the option in the cost of LNG or any other oil product chosen in announcing the monthly prices.
The Adviser on Finance has taken a serious view of the reported petrol shortage and directed all the relevant government ministries/departments to immediately inform him, if the situation worsens any further.
The ECC also approved proposal of Energy Ministry regarding reimbursement of operational cost of Single Point Mooring (SPM) installed by M/s BYCO and decided that BYCO would submit actual audited operating cost of the SPM (excluding Wharfage/FOTCO charges/crude saving) to the OGRA for inclusion in IFEM subject to a cap of PARCO rate, whereas the OGRA would determine the actual impact for inclusion in the IFEM, on ongoing basis.
Consequently, with the implementation of the above decision, BYCO will withdraw its case from the Supreme Court of Pakistan and would also provide an undertaking that the ECC decision conclusively closes the pending matter of the SPM's costs.
On Ministry of Energy's proposal, the ECC asked the Finance Division to release an amount of Rs1 billion to meet the cost over and above the criteria for supply of gas to villages and localities falling within five kilometres radius of gas producing fields as per instructions of the Supreme Court of Pakistan to implement an announcement of the prime minister made in September 2003 for supply of gas to villages and localities falling within the five-kilometres radius of gas producing fields.
On a proposal by the Ministry of Energy for payment of unrecovered fixed costs of Rs43.7 billion to the IPPs, the ECC directed the Finance Division to release Rs23 billion, while the issue of remaining payments would be resolved by all the stakeholders within one week and would be taken up in the next ECC meeting.
The ECC also took up and approved 12 separate proposals for technical supplementary grants of various amounts from different divisions and departments, including Interior Division, the NAB, Revenue Division, Cabinet Division, National Heritage and Culture Division, Finance Division, Federal Education and Professional Training, Communications Division, and Religious Affairs and Interfaith Harmony Division.
The ECC approved technical supplementary grant of Rs8.844 billion for capacity enhancement of civil armed forces (CAF) Western Border Management Phase-II.
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