ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved the import of 300,000 tonnes of wheat and 200,000 tonnes of urea at eight per cent and 17pc cheaper rates, respectively, at a total foreign exchange cost of about $222 million.

A meeting of the ECC presided over by Finance Minister Miftah Ismail also approved a Rs1.56 per unit increase in K-Electric’s power rates under a quarterly adjustment that would bring it on a par with the national uniform power tariff.

The ECC, on the request of the Ministry of National Food Security and Research, approved the lowest bid of $404.86 per tonne for 120,000 tonnes of wheat by firm Vittera B.V-Marine International with cost and freight bulk at the letter of credit on a sight basis. The Trading Corporation of Pakistan (TCP) was also allowed to match the tender quantity of 300,000 tonnes. This will entail foreign exchange spending of about $121.5m.

The meeting was informed that Pakistan had earlier in May contracted import of about 500,000 tonnes of wheat for delivery between July and Aug 15 at the lowest bid price of about $515.5 per tonne, involving a total foreign exchange payment of about $258m.

Approves Rs1.56 quarterly tariff hike for KE

In the third week of June, the TCP went for another tender of 300,000 tonnes of wheat import which fetched the lowest bid price of $439.4 per tonne for delivery between mid-August to Sept 15. The ECC first approved the lowest bid but then scrapped it after two days because of the declining international market and ordered fresh tender.

The TCP’s third tender was issued on July 7 for 300,000 tonnes based on LC on sight with a 90-day deferred payment. Out of seven responsive bids, the lowest bid for 120,000 tonnes this time came in at $404.86 per tonne (about $35 cheaper than earlier tender) on LC on sight involving a foreign exchange of $121.5m for 300,000 tonnes. Only a single bid on a 90-day deferred payment was received for $420 per tonne.

The estimated cost at Karachi Port is Rs89,066 per tonne while that of 90-day deferred payment basis bid for delivery at Karachi port worked out at Rs92,343 per tonne. The shipment window in both offers is August-September.

Urea import

The ECC also authorised the TCP for signing an agreement for the import of 200,000 tonnes of urea from China’s M/s Sinochem Fertiliser and M/s CNAMPGC at a negotiated rate of $500 per tonne freight-on-board (FoB) on a 90-day deferred payment with markup basis. The ECC directed that imports be made under the cabinet directives with an allocation of Rs22bn for this import with $100m as exchange cover, which has not been allocated into the budget 2022-23.

The meeting was informed that through negotiations, the Chinese authorities had agreed to reduce the offered price from $606 per tonne to $500 per tonne with an approximate saving of about $21.3m.

KE tariff

The ECC also approved about Rs1.55 per unit increase in average tariff for K-Electric for the second quarterly adjustment of 2021-22 in line with the national average tariff for distribution companies of ex-Wapda. Now the Power Division would take this approval to the National Electric Power Regulatory Authority (Nepra) for notification of the schedule of tariff under the national uniform tariff mechanism.

The adjustment shall be applicable on the consumption of July, August and September 2021 for recovery from consumers in August, September and October bills.

Levy on LPG increased

The ECC did not immediately approve a request of the ministries of energy and finance for an increase in petroleum development levy on liquefied petroleum gas by about 116pc to Rs10,111 per tonne instead of Rs4,669 per tonne at present to generate Rs8bn revenue during the current fiscal year. “The ECC returned the summary to the ministry for reconsideration of the proposal”, said an official statement.

Published in Dawn, July 21st, 2022