ISLAMABAD: Amid the Ministry of Finance’s kick over‘unsustainable energy subvention’, the Economic Coordination Committee (ECC) approved Rs55.48 billion for immediate payment of price discriminational claims (PDCs) to the canvas assiduity at cheaper rates of petroleum products than their costs for the first half of May. The ECC meeting, presided over by Federal Minister for Finance & Revenue Miftah Ismail, also allowed the Trading Corporation of Pakistan (TCP) to explore the possibility of importing tonnes of urea on a G2G base and on remitted payment, said an sanctioned statement. Besides Mr Ismail, the ECC was attended by only one member — diligence minister Makhdoom Syed Murtaza Mahmood.
Informed sources said the Ministry of Diligence and Production had suggested the need to make strategic reserves of urea in view of a thin periphery between domestic demand and stock position. The summary suggested having a better stock position to insure durability of urea force during the coming fiscal time and requested allowing import of urea from transnational requests in order to stabilise the original request.
It was suggested that significances should be arranged through an transnational competitive extending process. Still, because of a tight position of foreign exchange reserves and a further than Rs3, per tonne price difference between the original and transnational requests, the TCP was asked to take up the matter with Chinese authorities for urea import on a government-to- government base on remitted payments.
Mr Ismail on Sunday indicted the PTI government of easing urea import to Afghanistan and beyond because of largely subsidised product at home and mainly advanced transnational rates. He’d said Pakistan handed gas to fertiliser shops at Rs84-260 per million British Thermal Unit (mmBtu) despite importing it at about Rs3, per mmBtu but this fertiliser was allowed to smuggle out rather of reaching the domestic growers.
The ECC also approved supplementary entitlement of Rs55.48 bn for immediate disbursement to canvas marketing companies (OMCs) and refineries for the first fortnight of May, an sanctioned statement said, adding that due to the continuously rising trend of canvas prices in the transnational request, the amount of subvention has been on the advanced side.
This was despite the fact that the Finance Division put on record that “ maintaining energy prices at a subsidised rate is constantly adding financial and current account poverties and putting pressure on foreign exchange reserves.”
Besides, it claimed that the situation was creating stress on the force chain of petroleum products, which needed “ immediate retrospection of the policy of price subvention and also the resumption of recovery of petroleum development tax and deals duty.”
Informed sources said there was still a backlog of about Rs9bn on account of lower disbursements for the former month (April) which would be taken up for blessing on Wednesday. The sources said that the Oil & Gas Regulatory Authority had before estimated a PDC estimate of Rs102.3 bn for the whole month of May but latterly revised it to Rs118.6 bn because of the advanced transnational request.
As similar, the Petroleum Division had moved the summary for Rs118.6 bn but the finance ministry opposed such a bulk blessing in one go and acceded to only Rs52bn for first half of the month which was latterly revised to Rs55.48 bn including a former leftover differential of about Rs3.5 bn.
The finance ministry was of the view that the allocation for the coming fortnight — now estimated by the canvas assiduity to go beyond Rs76bn — should be considered independently depending on the duration and factual PDC. The meeting was streamlined that a aggregate of about Rs100.47 bn had formerly been allocated and transferred to the Pakistan State Oil’s Assan Assignment Account for payment to OMCs and refineries for March and April, including an outstanding quantum for November 1-4, 2021.