ECC Allows Import of 400,000 tons of Urea through Private Sector

The Economic Coordination Committee (ECC) of the Cabinet, which met under the chairmanship of Federal Minister for Petroleum and Privatization, Syed Naveed Qamar at the PM’s Secretariat here today, allowed the import of 400,000 tons of urea through private sector with a subsidy of Rs.750 per 50 kg bag to the private importers of urea on first come first served basis. The subsidy may be paid at the time of release of consignments on submission of Bill of Lading to State Bank of Pakistan. The bank will monitor and withhold the issuance of Letter of Credits (LCs) on the achievement of set target i.e. 400,000 tones.

The ECC also approved converting the credit of US $ 13 million into grant for Tajikistan. The ECC expressed the hope that this gesture will create goodwill between the two countries and improve bilateral economic and political ties.

The ECC also approved additional 20 MMCFD low Btu gas from Kandra field to be upgraded by the Producer to 300 Btu/Scf to be allocated to SSGCL which, along with additional 5 MMCFD pipeline quality gas from SSGCL’s System, will be placed at the disposal of PPIB for setting up a new IPP of 120 MW subject to following conditions:

a. Additional 5 MMCFD pipeline quality gas from SSGC’s system would be for 15 years starting from January 2012 and thereafter on best effort basis.

b. Signing of Gas Sales Agreement between Project Sponsor and SSGC within six months of gas allocation or any other time specified by the Ministry of Petroleum & Natural Resources failing which, the allocation shall become “null and void”.

c. Total cost of the pipeline system and measuring station will be borne by the project sponsors.

d. The gas allocation/supply would be under Natural Gas Allocation and Management Policy, 2005, therefore, the project sponsors must make combined cycle arrangements for the project.

In order to provide a level playing field to the local exporters, the ECC decided to withdraw 35% regulatory duty on the export of wheat products. The decision was taken in the light of bumper harvest of wheat this year due to which Pakistan has not only adequate wheat stock to cater for its domestic requirements but is in a position to export surplus as well.

During the meeting Ministry of Commerce made a presentation on the project “Reconstruction Opportunity Zones (ROZs).” The Competition Commission of Pakistan also made presentation on Cartelization by the Manufacturers of Cement, Sugar and Cars.

The ECC was informed that the stock of wheat as on September 7, 2009 amounted to 9.216 million tons as against 3.458 million tons in the same period last year, thereby showing a higher stock of about 5.758 million tons. There was an improvement in trade deficit by 38.5% to $ 2.19 billion in July-August 2009-10 from $ 3.56 billion in the same period last year. Workers remittances amounted to $ 1,525.4 million in July-August 2009-10 as against $ 1,219.5 million, showing an increase of 25.1% over the same period last year. The foreign exchange reserves stood at $ 14.4 billion as on September 10, 2009- up from $ 6.4 billion on November 25, 2008.