The Cabinet which is scheduled to meet on Monday, will empower the Oil and Gas Regulatory Authority (Ogra) to fix price of Ethanol-10 (E-10) per litre, in addition to resolving the controversy over imposition of PDL (petroleum development levy) on the blended fuel, sources close to Incharge Petroleum Minister told Business Recorder.
Sources said that the Economic Co-ordination Committee (ECC) of the Cabinet in its meeting on May 19, 2009 had considered a summary of the Ministry of Industries and Production on introduction of E-10 blended fuel in Pakistan and allowed the Petroleum Ministry to notify E-10 as motor vehicle fuel, and authorised Ogra to determine and notify ex-depot and retail prices of blended fuel for one litre. The ECC also directed all concerned functionaries to carry out amendments in the Ogra Ordinance.
Sources said that amendment in Ogra Ordinance 2002 is required to incorporate ethanol in the definition of 'refined oil products' appearing in section 2(1) (xxx) of the said Ordinance. The proposed amendment will enable Ogra to regulate marketing and pricing of 'Ethanol' as 'petroleum'.
In pursuance of the decision of the ECC, a draft 'Ogra (Amendment) Ordinance, 2009' was prepared and submitted to Prime Minister, Yousaf Raza Gilani on July 10, 2009, who directed that the issue be placed before the Cabinet.
During discussion in the Cabinet meeting on June 3, 2009, Environment Minister observed that his Ministry was not consulted while submitting the proposal to the ECC for introduction of Ethanol-10 blended fuel in Pakistan.
The Petroleum Ministry was requested to forward views/recommendations on the proposed amendments in Ogra Ordinance, 2009 to the Environment Ministry. Response is, however, still awaited.
The Cabinet will also resolve the controversy on imposition of PDL, as the Minister for Privatisation, Naveed Qamar, who presided over the ECC meeting on July 14, 2009, was of the view that the decision had not been recorded correctly by the Cabinet Division.
Qamar, in his letter dated July 25, 2009 pointed out that the decision taken by the ECC had been recorded "inaccurately". He directed that the decision should be revised to read as follows: 'PDL on Ethanol may be waived. However, the General Sales Tax on E-10 may continue'.
According to the 'wrong recorded decision', Rs 8 per litre PDL had been imposed on E-10. The pilot project had been launched through Pakistan State Oil (PSO) petrol pump opposite the Ministry of Foreign Affairs, Islamabad.
Cabinet Division accordingly revised the decision by issuing a corrigendum on August 5, 2009. In the meantime, the decisions of the ECC meeting held on July 14, 2009 had been submitted to the Cabinet for ratification. The Cabinet, in its meeting on August 5, 2009, ratified the decisions.
In terms of Rule 16 (2) of the Rules of Business, 1973, a summary was submitted to Prime Minister Gilani for ratification of revised decision. However, the Prime Minister Secretariat desired that the amended decision be ratified by the Cabinet.