Fortnightly notification of petroleum products' prices; export of 0.4m tons of sugar approved by ECC

ZAHEER ABBASI

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved export of 0.4 million tons of sugar. It also allowed fortnightly notification of petroleum products' prices.

A statement said the ECC meeting chaired by Finance Minister Dr Abdul Hafeez Shiekh allowed the export of 400,000 tons of sugar in two phases. The ECC took this decision following input from Ministry of Industries and TCP. Members of the committee were convinced that there is a satisfactory situation of sugar in the country, it added. An official of Ministry of Food Security and Research on condition of anonymity said the ECC decision to allow export of sugar may result in increase of sugar price in the country.

Sources said that the ECC approved fortnightly price adjustment of petroleum products despite opposition of the Oil and Gas Regularity Authority (OGRA). An official said the OGRA had opposed the move of petroleum price adjustment on fortnightly basis arguing that it would encourage hoarding of petroleum products and consequently create artificial shortage twice a month, thereby impacting the public at large. The OGRA stated that a fortnightly fixation of petroleum prices and hoarding would lead to a public outcry and criticism, particularly during the current trend of international prices and looming uncertainties.

This practice, OGRA stated was abolished by the federal government owing to above reasons and the regulatory authority advised against fortnightly fixation of petroleum prices.

On the other hand, Ministry of Petroleum and Natural Resources has said that oil prices in the international market have shown a consistent increasing trend and the quantum of increase accumulated during the months became substantial under the existing monthly price adjustment system.  In order to reduce the monthly accumulated higher pricing burdens on consumers, it is proposed that the domestic sale price of petroleum products may be adjusted fortnightly.

According to a statement subsequent to the meeting issued by the Finance Ministry stated that the ECC had constituted a committee to thoroughly re-examine fortnightly price fixation proposal and submit a summary to the ECC with recommendations.

The statement further stated that the ECC also held a detailed discussion on the summary moved by Ministry of Water and Power, seeking approval of Sub-Committee's report with respect to delay in payments made by the power purchasers to IPPs under Power Policy 2002.  The ECC directed the Ministry of Water and Power to further improve the terms of settlement of dues with IPPs and submit a report in this regard.

The meeting approved various summaries moved by Ministries of Petroleum and Natural Resources, Finance Division and of Commerce and Industries Ministries.  The ECC also approved the summary moved by External Finance Wing of Ministry of Finance for the ex-post facto approval for establishment of a subsidiary in Tajikistan, a request by National Bank of Pakistan seeking permission to allow investment abroad by resident Pakistanis to remit the Tajik Somoni 50 million (approximately equivalent to $10.5 million) to establish its subsidiary, NBP in Tajikistan.

On a summary moved by the Ministry of Petroleum and Natural Resources for allocation of gas at Wellhead of OGDCL Dormant Field, the ECC directed Ministry of Petroleum and Natural Resources to coordinate with Government of Sindh for getting a formal approval from the latter in this regard. 

On a summary moved by Ministry of Commerce with respect to tariff protection to the industry manufacturing Electrolytic Tinplate, the ECC approved the proposal and directed the concerned officials of Ministry of Commerce to prepare a summary for strengthening the National Tariff Commission (NTC).

The ECC also approved enhancement of exploration expenditures limit of US $20 million to US $40 million for Mari Gas Company Limited, which was sought by the Ministry of Petroleum and Natural Resources.

While approving another summary of Ministry of Petroleum and Natural Resources for acquisition of MND Exploration and Production Limited's assets in Pakistan and Yemen through purchase of shares, the ECC instructed the concerned Ministry to ensure strict observation of law of the land in terms of foreign exchange. The summary has sought that Pakistan Petroleum Limited may be authorized to bid for the sale of assets of MND Exploration and Production Limited.

Moreover, the ECC constituted a committee comprising Minister for Water and Power, Information Technology, Secretaries Petroleum and Law, Deputy Chairman Planning Commission (DCPC) and representatives from OGRA and Finance Division to look into the summary for the import of LNG, moved by Ministry of Petroleum.

The ECC also discussed various legal and technical aspects of a proposal made by Ministry of Petroleum to refund General Sales Tax on gas infrastructure development cess. In this regard, the Chairman FBR maintained that under the law there is no provision to refund the GST on gas infrastructure development cess.

Other summaries approved by ECC are "An overall financial limit to pursue international exploration opportunities" and "Extension in GoP guarantee against financing for National Investment Trust NIT-State Enterprise fund for further two years and reduction in guarantee amount from Rs.20 billion to Rs.12.2 billion, the statement concluded.