ECC for strict steps to bring down sugar prices; 0.25 million tonnes urea to be imported for Kharif

The Economic Co-ordination Committee (ECC) of the Cabinet has decided to take strict measures against speculators to bring sugar prices within the reach of common man. "The ECC took serious note of prevalent sugar prices and said that a 'cartel' was behind the high prices of sugar, and now the government will take strict measures to improve the situation," Dr Ashfaque Hasan, Economic Adviser to the Finance Ministry, told reporters after ECC meeting which was chaired by Prime Minister Shaukat Aziz here on Tuesday.
He said that when the ECC was briefed that sugar was being sold in the country at Rs 26 - 28 per kg, the members of the committee felt that the hike in sugar prices did not match with the abundant supply of the commodity in the country.
He said that 2 million tons stock of sugar was available with the mills while 0.36 million tons was being imported and ships carrying 2,12,000 tons have reached the port, but the prices were not coming down.
"It is the ECC's view that it's a cartel fixed rate, not the open market price, and now the government will give attention towards this situation," he added.
The situation in the briefing became more interesting when journalists asked that when Federal Ministers themselves own sugar mills and influence ECC decisions how sugar prices would come down. He said that he would give a full-fledge presentation to the ECC about the whole situation in its meeting.
Asked whether the government would take action against ministers who are a part of the 'cartel', he said that if action has to be taken against any of the ministers it would be considered in the ECC meeting.
The newsmen at the briefing individually named the ministers who own mills. When the Economic Adviser was asked why the government asked those ministers to bring summary who were already a part and parcel of the cartel, he said that now he has been asked to submit summary and give presentation to the ECC.
UREA IMPORT: The ECC also allowed import of 250,000 tonnes urea for Kharif immediately through TCP. However, the Economic Adviser did not give any details about the subsidy to be given on the import. He just said that the issue of subsidy would be discussed later because priority was timely import of the commodity. It may be mentioned here that the government has imported 238,000 tonnes urea for Rabi season.
An official of Ministry of Industries and Production told Business Recorder that Ministers committee constituted by the ECC had recommended in its summary that 0.5 million tonnes urea should be imported up to December through TCP because private sector had declined to import the item. The Economic Adviser, however, said that he was not aware of private sector's refusal.
Dr Khan further said that total demand of urea for Kharif was 2.429 million tonnes while total production was 2.267 million tonnes, and added that there was need to substantially increase production of urea domestically.
The Prime Minister has asked the Minister for Industries and Production to meet local producers of urea and gas companies to enhance urea production, he said, adding that the Prime Minister would also meet the fertiliser producers and officials of gas companies in this regard.
He said ECC has given four years grace period to new cellular companies ie Telenor and Alwarid, to deposit first instalment of remaining 50 percent amount ($1.455 million) of total $2.91 million as licence fee.
According to the rule, each company has to deposit half of the fee at once while the remaining amount has to be deposited in four equal instalments in ten years. Telenor and Al-Warid had deposited half of the licence fee as per the rule, and their first instalment of remaining fifty per cent fee was due in May next.
Interestingly, a few months earlier ECC had allowed Paktel company to deposit $1.455 million, 50 percent of the total fee in three years rather than at once and set a precedent for other companies to seek similar relaxation. Consequently, Telenor approached the government and said the favour shown to Paktel by the ECC has put their company in a very disadvantageous position. The company sought four years relaxation on the remaining first instalment due from May.
When Dr Ashfaque was asked why ECC gave out of the way relaxation to Paktel and whether there was any element of corruption, he had no answer, except that it was the decision of ECC.
RESTRUCTURING AND PRIVATISATION SSGC AND SNGPL: The ECC decided to restructure and privatise both SSGC and SNGPL in existing integrated position as there was no need to unbundle them. The Privatisation Commission and Ministry of Petroleum were of the view that gas companies should be unbundled before sell-off but Oil and Gas Regulatory Authority (Ogra) opposed the move vigorously, an official close to the development told this scribe.
The ECC did not approve a proposal of CBR, according to which it was suggested relaxation should be given to resident Pakistanis to import used cars in accordance with personal baggage scheme, transfer of residence scheme and gift scheme. The committee decided that the issue would be seen in the forthcoming budget.
The ECC decided that all imports destined for Afghanistan under Afghan Transit Trade Agreement (ATTA) would only be transported and handled by Pakistan Railways and NLC besides local exports. However, if both do not have the capacity to handle such logistics, then private sector would be involved.
On the fate of 69 faulty diesel engines imported from China, the Economic Adviser said that the Ministry has been asked to work more on the issue before bringing the summary again.
He said that workers' remittances are to touch $4 billion figure by June 30, 2005. However, during July-March 2005, the remittances increased to $3.05 billion, by over 6 percent as against the $2.875 billion in the corresponding period of last fiscal year. He said that foreign investment increased to $900.7 million during the July-March period as against $586.85 million in the same period of last fiscal showing an increase of 53.5 percent.