ECC constitutes committee to review cotton prices

Shoaib Ur Rehman August 8, 2019

ISLAMABAD: In addition to taking several other decision, the Economic Coordination Committee (ECC) of the Cabinet Thursday decided to constitute a Price Review Committee headed by Advisor Ministry of Commerce and Textile, to review and suggest the indicative price and other measures to be taken in case of abnormal fluctuations in the cotton prices.

The Committee which was chaired by Dr. Abdul Hafeez Shaikh, took this decision on a summary of  Ministry of National Food Security and Research (MNF&R) that sought minimum support price for cotton to protect the local farmers and encourage cotton cultivation in the country.

The ECC was also briefed by the Ministry on the wheat situation in the country, saying that PASSCO and provincial food departments had reported wheat stocks at the level of 7.519 million tones as on August 2nd, 2019 as compared to 11.183 million tons during the corresponding period last year.

Earlier, the Pakistan Bureau of Statistics on July 25, had reported the local price of wheat and wheat flour at the level of Rs 362.6 and Rs 422.2 per 10 kg respectively, showing a decrease of 0.03 per cent for wheat and 0.69 percent for wheat flour, as compared to the price level of 2nd week of July 2019.

The Committee instructed the Ministry to regularly monitor the wheat prices, ensure availability of wheat stocks in the country and its release to the local market throughout the year besides keeping check on the wheat price hike tendency, particularly in the winter season.

On another summary submitted by the Ministry requesting for supplementary grant of Rs 530 million for locust control, the ECC directed the Ministry of Finance to look into the matter in consultation with MNF&R.

The ECC also discussed the Ministry of Energy’s proposal for extension of gas network and rehabilitation of existing network in oil & gas producing districts of Khyber Pakhtunkhwa at a cost of Rs 9.039 billion and in the light of input from the members.

The Committee directed the Ministry to resubmit the proposal after taking input from the Planning and Finance Divisions. On another summary regarding gas/RLNG supply to industrial sector, including exporters of five zero-rated sectors, the ECC approved the subsidy claims for the month of March (based on 100 percent RLNG supply), April, May and June 2019 amounting to Rs 5,173,701,600 based on actual verified bills/claims of M/s SNGPL for release out of the budgeted allocation of current financial year for any shortfall in the budgeted allocation at subsequent stage through supplementary grant.

In order to further simplify the subsidy disbursement process, the ECC also approved a proposal for allowing SNGPL to raise verified subsidy bill/claim of preceding month by 8th day of every month and Finance Division to release the subsidy within seven (7) days of receipt of claim from Petroleum Division.

Upon receipt of subsidy amount, M/s SNGPL shall promptly issue adjusted invoices to export-oriented sector in the next bill cycle.

The ECC also approved the proposal for the export-oriented sector to pay the invoices at ECC approved tariff of US$ 6.5 per MMBTU along with applicable taxes.

It further approved that waiver of interest/Late Payment Surcharge (LPS) charged by SNGPL on the amounts over and above the tariff of $6.5 per MMBTU during the FY-2018-19 which was due to delayed subsidy release by the Government. According to the decision, for FY 2019-20, LPS shall only be charged on the delayed payment of US $ 6.5 per MMBTU and it would not be applicable on the subsidy amounts to be released by Government to SNGPL.

The ECC further directed the Ministries of Energy, Finance and Commerce and Federal Board of Revenue (FBR) to convene a meeting on the subject and resolve the issue regarding clarification of nomenclature of export-oriented sector so that benefits of concessional tariff be limited to exporters under previous notified zero-rated regime and to ensure that any exporter that was previously not beneficiary of concessional tariff would need certification of falling under the clarified regime from FBR.

On the occasion, Special Assistant to PM for Petroleum Division Mr. Nadeem Babar also briefed the ECC on the movement of diesel by Pakistan Railways by saying that 16148 tonnes of diesel had already been moved inland through the Pakistan Railways in the month of July and the same was expected to increase to 35,000 tonnes in the current month of August after assessment of decanting facilities available with Shell, Parco and Hesco.

Copyright APP (Associated Press of Pakistan), 2019

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