ISLAMABAD: Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh on Thursday chaired a meeting of the Economic Committee of the Cabinet (ECC).
The committee, on a summary presented by the Ministry of National Food Security and Research (NFS&R) seeking minimum support price for cotton to protect the local farmers and encourage cotton cultivation in the country, decided to constitute a price review committee under the chair of the PM’s commerce adviser to review and suggest the indicative price and other measures to be taken in case of abnormal fluctuations in the prices of cotton.
The Ministry of NFS&R also briefed the ECC on the wheat situation in the country, saying that Pakistan Agricultural Storage and Services Corporation (PASSCO) and provincial food departments had reported wheat stocks at the level of 7.519 million tonnes as on 2nd August 2019, as compared to 11.183 million tonnes recorded in the corresponding period of last year.
Similarly, the Pakistan Bureau of Statistics on 25th July 2019 had reported the local price of wheat and wheat flour at Rs362.6 and Rs422.2 per 10kg respectively, showing a decrease of 0.03pc for wheat and 0.69pc for wheat flour, as compared to the price in the second week of July 2019.
The committee instructed the NFS&R ministry to regularly monitor the wheat prices, availability of wheat stocks in the country and ensure the release of wheat stocks to the local market throughout the year, besides checking the tendency of surges in the wheat prices, particularly in the winter season.
On another summary submitted by the Ministry of National Food Security and Research requesting for supplementary grant of Rs530 million for locust control, the ECC directed the Ministry of Finance to look into the matter in consultation with the Ministry of NFS&R.
The Ministry of Energy also submitted a summary to the ECC for extension of gas network and rehabilitation of existing network in oil & gas producing districts of Khyber Pakhtunkhwa at a cost of Rs9.039 billion, out of which the Sui Northern Gas Pipeline Limited (SNGPL) was to bear the cost equal to Rs4.668 million while the Khyber Pakhtunkhwa government was to chip in with Rs4.371 million, of which Rs694.5 million had already been released as the first tranche by the provincial government.
The ECC discussed the proposal and in the light of input from the members directed the Ministry of Energy to resubmit the proposal after taking input from the planning and finance divisions.
On another summary regarding gas/RLNG supply to the industrial sector, including exporters of five zero-rated sectors, the ECC approved the subsidy claims for the month of March (based on 100pc RLNG supply), April, May and June 2019, amounting to Rs5.17 billion.
In order to further simplify the subsidy disbursement process, the ECC also approved a proposal for allowing SNGPL to raise verified subsidy bill/claim of preceding month by the 8th day of every month and Finance Division to release the subsidy within seven days after receipt of claim from the Petroleum Division. Upon receipt of subsidy amount, SNGPL shall promptly issue adjusted invoices to the export-oriented sector in the next bill cycle.
The ECC also approved the proposal for the export-oriented sector to pay the invoices at the ECC-approved tariff of $6.5 per MMBTU along with applicable taxes. It further approved that waiver of interest/Late Payment Surcharge (LPS) charged by SNGPL on the amounts over and above the tariff of $6.5 per MMBTU during the FY2018-19 which was due to delayed subsidy release by the government.
For FY2019-20, LPS shall only be charged on the delayed payment of $6.5 per MMBTU and it will not be applicable on the subsidy amounts to be released by the government to SNGPL.
The ECC further directed the ministries of energy, finance and commerce and FBR to convene a meeting on the subject and resolve the issue regarding clarification of nomenclature of export-oriented sector so that benefits of concessional tariff be limited to exporters under previous notified zero-rated regime and to ensure that any exporter that was previously not beneficiary of concessional tariff would need certification of falling under the clarified regime from FBR.
Towards the end, Special Assistant to PM for Petroleum Division Nadeem Babar briefed the ECC on the movement of diesel by Pakistan Railways. He said that 16,148 tonnes of diesel had already been moved inland through the Pakistan Railways in the month of July and the same was expected to increase to 35,000 tonnes in the current month after assessment of decanting facilities available with Shell, PARCO and HESCO.