The Economic Coordination Committee (ECC) of the Cabinet Wednesday directed the Ministry of Finance to explore all possibilities for improving the liquidity position of Pakistan State Oil (PSO) whose exchange losses have soared to around Rs 28 billion on FE 25 loans.
However, sources on condition of anonymity said that secretary finance plainly informed the meeting that he was not in a position to make any commitment for provision of any funds in the current fiscal year to PSO. The secretary finance was quoted as stating that Finance Ministry can not issue even one rupee supplementary grant, may be because the country is under an International Monetary Fund (IMF) programme.
Sources further stated that the finance secretary told the meeting that Finance Division can not issue any fund without the approval of the Parliament. However, he added that by the end of fiscal year if any budgeted allocation was left unutilized, Finance Division would entertain the request pf PSO for meeting its losses on foreign exchange. The secretary finance, however, assured the meeting that needed fund would be provided to the PSO in the budget for next fiscal year.
A statement issued after the meeting stated that Finance Ministry assured the ECC of utilization of all possible funding options in the ongoing financial year and any deficiency in the funds shall be entertained in the upcoming budget. The ECC also granted approval of allocation of gas from PGNiG's Rizq Gas Field to M/S SSGCL. It was briefed to the ECC that currently 2 wells namely Rizq-1 and Rizq-2 are producing 16 MMFCD gas from Rizq gas field, which are allocated to M/s SSGCL, whereas Rizq-3, which is under drilling, is expected to add another 9 to 10 MMCFD gas to the existing production. The meeting was informed that upon completion of this well, the cumulative gas production from this gas field is expected to increase up to 25 MMCFD. The price of the gas shall be according to the applicable Petroleum Policy.
The ECC approved the Technical Supplementary Grant of Rs 1 billion under demand No 04, Cabinet Division, for establishment of Pakistan Tourism Development Endowment Fund under public account. The chair directed Pakistan Tourism Development Corporation to come up with their tourism development and soft image promotion plan in the next meeting. The ECC also gave approval to the constitution of the price negotiation committee for TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project. The committee would negotiate the price with Turkmen gas.
The committee would consist of the following members; secretary Ministry of Energy (Petroleum Division) as chairman, secretary finance or his nominee, joint secretary, Ministry of Energy (Power Division), director general (gas)/ director (gas) and managing director, SSGCL as members.
On the demand moved by the Ministry of Industries and Production for Rs 3.02 billion for the payment of outstanding dues of SSGC Private Limited by Pakistan Steel Mills on account of gas bills, the ECC directed to constitute a three-member committee under the chairmanship of secretary finance to find out a feasible solution for the issue so that the already allocated budget may not be exceeded and the liabilities of both SSGC and PSM are duly settled.
The ECC granted extension to the government of Pakistan guarantee against credit facility of National Bank of Pakistan amounting to Rs 5 billion in favor of Utility Stores Corporation of Pakistan.
On the request of the Ministry of Water Resources, the ECC granted approval to WAPDA to raise loan for the settlement of the financial facility amounting to PKR 17.500 billion with one-year tenure and GoP guarantee. Clearance under Prudential Regulations R-4 (clause 1a and 2) from the State Bank of Pakistan to disburse the facility initially against a letter of comfort was also granted.
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