• Allows import of cotton from Afghanistan, Central Asian Republics
• Commission for oil companies, dealers increased
• Two Punjab-based fertiliser plants to get subsidised gas

ISLAMABAD: The government on Wednesday increased commission for oil companies and their dealers on sale of petroleum products, allowed import of cotton from Afghanistan and Central Asian Republics through Torkham border and approved Rs7.8 billion worth of Ramazan package for Utility Stores.

The decision was taken at a meeting of the Economic Coordination Committee of the cabinet presided over by Finance Minister Dr Abdul Hafeez Shaikh. The ECC also allowed provision of subsidised natural gas to two Punjab-based fertiliser plants — Fatima and Agritech — for nine months with additional subsidy of Rs2bn to Sui Northern Gas Pipelines Limited.

The increase in dealers’ commission and profit margins of oil marketing companies (OMCs) came a day ahead of a strike call given by the dealers of petroleum products. The Petroleum Division had moved a summary for 6.8 per cent increase in margins for both segments in line with the rate of inflation.

However, in the absence of Petroleum Division’s team, including the prime minister’s assistant, secretary and director general oil, the ECC increased the margins by 6pc as an interim arrangement to ward off the looming strike by the dealers.

As such, the OMCs will now charge Rs2.98 on sale of each litre of petrol and diesel, instead of the existing rate of Rs2.81. Likewise, the dealers will now charge Rs3.92 per litre on petrol, instead of Rs3.71, and Rs3.31 on diesel, instead of Rs3.12.

According to an official statement, the ECC approved the revision of commission and margins on the basis of 85pc of the latest average core inflation with immediate effect, and directed that a study by the Pakistan Institute of Development Economics be expedited.

The ECC also took up a summary ‘Ramazan Relief Package-2021’ on the directive of the prime minister to provide relief to the marginalised segments of society during the holy month. The Utility Stores Corporation (USC) would subsidise 19 essential items under the relief package, entailing a subsidy of about Rs7.8bn.

The meeting was informed that prices of wheat flour, sugar and ghee had significant differential vis-à-vis prevailing prices in the domestic market. It was told that procurement of essential items would start from April 1 to ensure their availability at discounted prices through 4,000 USC outlets across the country.

The ECC also approved a summary of the Ministry of Industries and Production seeking permission for operation of two plants — Agritech and Fatima Fertiliser — from March till November 2021 to produce urea from SNGPL-based plants to bridge the gap between estimated demand and actual domestic production of urea in the country. The ECC directed the industries ministry to closely monitor the demand-supply situation and take decision to import urea, if needed, as per requirement during the current year.

The meeting also approved a summary of the Ministry of Commerce seeking permission for import of cotton from Afghanistan and Central Asian States through land route via Torkham border to bridge the gap between supply and demand and to ensure sufficient availability of cotton for promoting textile exports.

The ECC was informed that it had granted such permission earlier to work out necessary arrangements for import of cotton via land route.

The commerce ministry requested the ECC to extend the permission for import of cotton via land route during the current financial year. The meeting approved the request and ordered that codal formalities be fulfilled.

The Ministry of National Health Services tabled a summary for exemption from taxes and duties import of auto disable syringes and raw material needed for local manufacturing of such syringes. The meeting was informed that there was a need to switch from conventional syringes to auto disable syringes as reuse of conventional syringes was resulting in blood-borne diseases like hepatitis, HIV, etc. The ECC approved the summary, in principle, and directed the ministry to hold a follow-up meeting with the Law Division to fine-tune details.

The ECC considered a summary regarding exemption of federal excise duty on 10 soft-skin vehicles imported by the Food and Agriculture Organisation (FAO) to be used by the Department of Plant Protection for locust control operations. The Ministry of National Food Security demanded a one-time FED exemption of Rs10.3 million on the 10 vehicles.

After discussions, the meeting constituted a committee comprising representatives from the Law Division, FBR and national food security ministry for further discussion and submission of updated proposal before the ECC.

The Ministry of Information Technology presented a summary for addressing critical issues of the cellular mobile industry for digital enablement such as reduction in Nadra biometric verification charges (BVC), licence renewal under further spectrum price, etc. After a detailed discussion, the meeting constituted a subcommittee led by Adviser to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain and comprising the secretaries of information technology and finance and the Pakistan Telecom Authority to deliberate further on the summary and present it before the ECC.

The communications secretary updated the ECC on the National Freight and Logistics Policy (NFLP) discussed in an earlier meeting. The Ministry of Communications has segregated the proposals into two broad categories in line with an earlier directive by the committee. The ECC asked for discussing the proposals involving multiple stakeholders, as envisaged under the NFLP, through an institutional framework, steered by the deputy chairman planning for evolving consensus among all stakeholders, including provincial representatives, for a way forward.

The Power Division had sought retargeting of power sector subsidies (phase-I). However, the meeting directed the division to complete the analysis based on certain principles and come back with specific recommendations on thresholds and rates for consumers before the ECC by March 31.

The ECC also approved seven supplementary grants worth Rs3.42bn.

Published in Dawn, March 11th, 2021