ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed the Power Division to make immediate payments worth Rs32.8 billion to save PSO from defaulting on international payments.
In this regard, Federal Minister for Finance and Revenue Miftah Ismail presided over the meeting of the ECC at the Finance Division on Sunday.
According to the details, the Petroleum Division submitted a summary on an SOS call for funds for Pakistan State Oil Company Ltd. (PSOCL) to meet international contractual payments during August 1 and August 14.
It was informed that there has been a decline of 28 per cent and 32pc in the sales of HSD and MS for PSO whereas further devaluation of the rupee has resulted in an increased cost of procurement of petroleum products.
To ensure the smooth continuity of national oil and gas supply chain and avoiding a default by PSO on international payments, the ECC decided to clear outstanding payments accumulated during the previous government’s tenure and approved an amount of Rs30 billion as a supplementary grant for PSO receivables.
It was also decided that the Power Division will make immediate payments of current outstanding amounts of Rs20bn by August 1 and Rs12.8bn by August 4.
The ECC also directed the Finance Division and FBR to submit a proposal for the generation of Rs30bn through taxes within a week’s time.
Regarding another summary regarding the price mechanism of petroleum products, the ECC accepted the proposal to use the average exchange rate for the relevant period rather than the exchange rate of the last day for current and future price determinations.
The meeting also directed the Petroleum Division to work out in consultation with OGRA to determine other options of setting up petroleum product prices in addition to directing the Petroleum Division to submit a proposal to regulate the prices of kerosene oil and LDO after consultation with relevant stakeholders within a week.