ISLAMABAD, Feb 10: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday asked the ministries of petroleum and finance to work out a plan to hedge petroleum products taking an advantage of declining international oil prices.

Oil prices declined by more than 70 per cent to around $44 per barrel in international market from $147 per barrel, the highest ever increase. A similar proposal was moved in 2002, but it could not materialise.

Presiding over the ECC meeting, Advisor to Prime Minister Shaukat Tarin asked the ministries to submit a comprehensive technical and financial proposal to the ECC for consideration.

The meeting endorsed, in principle, Cabinet’s earlier approval of increasing wheat procurement target from five to 6.5 million tons, and directed the ministries of food and agriculture and finance to jointly work out domestic distribution and export strategy.

The ECC advised Minfal to interact with provinces and Passco to cross-check and finalise their wheat procurement ceiling, storage and distribution strategy by March 1.

The meeting further directed the Minfal to work on its wheat procurement policy for 2009 in consultation with provinces and other stakeholders, and resubmit a comprehensive proposal in the next ECC meeting.

The ECC was informed that out of 2.5 million tons of wheat earmarked for import, 1.76 million tons had arrived to supplement the existing stock which stood at 1.666 million tons as on Feb 1.

Reviewing the Minfal summary on wheat procurement policy, the ECC noted that government’s earlier announcement of Guaranteed Minimum Price (GMP) had resulted in an increase of wheat cultivation area, simultaneously encouraging farmers to judiciously use input in wheat cultivation.

It noted that existing sugar stock was reported to be around 1.173 million tons to supplement open market needs.

The ECC was informed that Utility Stores Corporation management had taken special measures to ensure quality and quantity of food items on USC’s outlets.

The ECC noted that 52 per cent of planned quantity of urea has arrived, whereas 48 per cent is due by the end of current month.

The ECC considered ministry of industries and production summary on provision of seed money for Pakistan Stone Development Company’s (PASDEC) Marble Cities Project, and reconfirmed its earlier approval to arrange loan of Rs400 million from the banking system, enabling PASDEC to develop infrastructure for proposed marble cities, which has tremendous potential for growth and development and could boost national economy.

The ECC approved Ministry of Petroleum and Natural Resources proposal for gas supply to 50MW power projects by diverting 12mmcfd gas from SSGC system to PPIB, Ministry of Water and Power for five years for power generation in accordance with Natural Gas Allocation and Management Policy – 2005.

The meeting was informed about the trend of increase in milk prices.

The ECC constituted a committee comprising representatives of Minfal, Ministry of Livestock and Dairy Development and the Planning Commission to formulate a strategy for provision of benefits of stable milk prices to small farmers.

The ECC approved the Ministry of Industries and Production’s summary for allocation of additional 35mmcfd natural gas from Mari Gas Field to Fatima Fertiliser Company from October 2009 with certain modifications.

The ECC reviewed Key Economic Indicators (KEI) and overall price situation. The meeting further noted that forex reserves during January 2009 stood at $ 10.3 billion that included impact of IMF’s first tranche of disbursement and other positive inflows.

The overall workers’ remittances during July-December 2008 amounted to $3640.0 million showing an increase of 18.7 per cent. Foreign Direct Investment during (July-December, 2008) amounted to $2327.3 million, registering a healthy growth of 12.6 per cent compared with last year’s period under review.