The Finance Ministry has raised concerns over the high interest rates incurred by the Trading Corporation of Pakistan (TCP) on loans from commercial banks and has requested a special audit to evaluate whether the terms agreed were competitive and justified at the time, according to official sources. As reported in the Business Recorder
During a recent meeting of a National Assembly committee, officials from the Finance Division revealed that TCP currently holds Rs156.9 billion in liabilities, of which Rs126 billion pertains to urea procurement and the rest to wheat. While the principal liabilities are largely reconciled, disputes remain over markup calculations and accrued interest.
The Utility Stores Corporation (USC) has been directed to pay Rs24 billion to settle part of its dues to TCP—Rs6 billion to be paid directly by USC and Rs18 billion through a government subsidy. Of this, Rs5 billion is available in the current fiscal year, and Rs15 billion has been proposed for FY2025-26.
In parallel, National Fertilizer Marketing Limited (NFML) owes Rs53 billion, with a 50:50 cost-sharing mechanism agreed between the federal and provincial governments. From the federal share of Rs26 billion, only Rs10 billion is currently available. However, the Ministry of Commerce has not yet moved the required summary to release funds, the Finance Division confirmed.
Officials stressed that reconciliation among all stakeholders is a prerequisite before any disbursement or adjustment of funds. The Finance Division urged the Ministries of Commerce and Industries to expedite coordination with provincial departments and provide the required reconciled data.
TCP informed the panel that prior to 2018, there was no formal system for reconciling such transactions, but this has since been corrected, with all recent agreements involving NFML now documented. TCP is responsible for procurement and associated interest liabilities, while NFML and provincial authorities handle the distribution of urea. The Ministry of Industries is expected to secure budget allocations from the Finance Division to cover these costs.
The National Assembly committee expressed alarm over the rising interest burden, particularly as the Economic Coordination Committee (ECC) had not specified any markup provisions in its approvals. TCP, however, countered that the ECC summaries implicitly included credit arrangements, processed through the State Bank of Pakistan, with full awareness that interest would apply.
