ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet approved a Ramazan relief package worth Rs2.5 billion at its meeting on Wednesday and decided to hold a special meeting on Thursday (today) to thrash out a course of action for helping the Pakistan State Oil avoid a default.

The meeting, presided over by Prime Minister’s Adviser on Finance Dr Abdul Hafeez Shaikh, directed the State Bank to hold negotiations with a Chinese consortium working on the Kohala Hydroelectric Project for settlement of a dispute over foreign exchange losses.

It decided to waive taxes on electronic transfer of funds to 1.2 million recipients of Ehsaas programme till June 30.

Measures to help PSO avoid default to be discussed today

An official told Dawn that the government had come up with the Ramazan package to ensure the sale of five essential items through Utility Stores at existing rates. The package will become effective on April 17 — a week before the start of Ramazan.

The meeting noted that there was no need for an additional allocation because a Rs50bn package was already under implementation.

The ECC was told that arrangements had been put in place to ensure that prices of five essential commodities remained unchanged until the end of the holy month. This would mean the sale of sugar at Rs68 per kilogram, wheat flour at Rs800 per 20kg, ghee at Rs170 per kg, gram pulses at Rs130 and two varieties of rice at Rs139 and Rs149 per kg, the meeting was informed.

The ECC approved a Rs50bn technical supplementary grant for the Utility Stores Corporation (USC) announced under the PM’s relief package. The corporation was directed to ensure provision of essential items at reduced prices in view of the Covid-19 crisis and Ramazan.

The meeting noted that Rs21bn had already been disbursed to the USC under the package after December for procurement of essential items. The USC management assured the ECC that it was using its market presence to ensure availability of essential items at affordable rates to the consumer.

PSO affairs

A senior government official told Dawn that the state-run Pakistan State Oil was in dire straits and needed Rs61bn urgently to avoid two defaults before April 15 and April 30. He said the receivables of the country’s largest oil and LNG importer had gone past Rs371bn, mostly from the public sector, and the company had even exhausted its local and foreign currency credit limits.

Special Assistant to the Prime Min­ister on Petroleum, Nadeem Babar, refused to comment on the matter.

An official statement said the ECC approved six technical supplementary grants, including Rs842 million for paying off the executing agencies of the prime minister’s youth loan scheme during the current financial year and Rs90.459m for the Pakistan Nuclear Regulatory Authority to help the organisation meet its obligations.

The technical grants also include a payment of Rs5m to Punjab Rangers for the purchase of helicopter spare parts during the current financial year,

The ECC approved a $1.5m grant for the energy ministry to make payment to lawyers hired to represent the state in a case against Ms Karkey of Turkey.

A Rs300 million grant was approved for the information ministry to help it execute a three-month promotional campaign for the Ehsaas Programme.

On a summary moved by the Economic Affairs Division for recovery of foreign currency loans from Galadari Cement, the ECC asked the division to resubmit the proposal after consultations with the State Bank.

The ECC deferred to Thursday a summary prepared by the petroleum division seeking compensation against foreign exchange losses faced by oil companies, particularly PSO, in oil pricing.

The petroleum division has worked out an increase of 60 paisa per litre in prices of petrol and high speed diesel in order to compensate the PSO for losses suffered over oil imports due to persistent devaluation of the rupee and suggested its permanent build-up in the pricing mechanism.

It has proposed that 60 paisa per litre differential cost based on imports by PSO be adjusted against exchange loss as per actual exchange rate and the cost of actual letters of credit or 60 days of bills of landing whichever is earlier.

The arrangement will be treated as adjustment for other companies for local products in line with import parity price of PSO’s actual weighted average exchange rate for imported products, particularly petrol and HSD.

Published in Dawn, April 9th, 2020