Friday September 29, 2023

ECC okays Rs822m grant for Balochistan’s fishermen

By Our Correspondent
December 22, 2022

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the supplementary grant of Rs822.750 million for enabling the Gwadar Port Authority (GPA) to disburse Rs250,000 per head among 3,291 fishermen registered with the Balochistan Fisheries Department for the purchase of boat engines.

The ECC meeting presided over by Minister for Finance Ishaq Dar approved the technical supplementary grant of Rs200 million in favour of Ministry of National Health Services, Regulation and Coordination for Ghurki Trust Teaching Hospital (GTTH), Lahore.

The meeting also approved the summary moved by the Ministry of Energy (Petroleum Division) with regard to transfer of 30 percent working interest of M/s MoL to M/s MPCL in the Margala Block.

However, the ministry deferred a summary submitted by the Ministry of Energy (Petroleum Division) for foreign exchange coverage to PSO and directed the ministry to resubmit the summary after reviewing the numbers.

The Ministry of Energy informed the ECC that Pakistan was utilising a credit facility of Kuwait Petroleum Corporation (KPC) for supply of diesel under the contract with Pakistan State Oil (PSO) since 2000.

In April 2020, the NBP account witnessed a huge shortfall in terms of exchange losses, looming the risk of payment default. Given the situation, the ECC had granted approval of Rs11.7 billion for the transfer of funds into the NBP account.

Now, the NBP account has witnessed actual exchange losses of about Rs17 billion up to the last remittance made on December 2, 2022, owing to prevalent upheaval in the rupee-dollar parity during the period.

Meanwhile, PSO has been defaulting on rupee deposits in the NBP account owing to its liquidity issues, as its receivables have reached to Rs612 billion and it urgently requires adequate funds so that liabilities are met in a timely manner.

To avoid any international default, the Petroleum Division is trying to manage the remittances in consultation with PSO to KPC by depositing required funds on the remittance dates but the situation is too critical keeping in view its liquidity problems.

In order to ease the liquidity position of PSO, the Ministry of Finance had released an amount of Rs30 billion under FE-25 loans during September 2022. Besides, cash injection of Rs50 billion has also been provided to PSO through market financing under GOP guarantee. PSO has delayed all outstanding payments due to liquidity position. In case, the credit facility is not extended by KPC, the last remittances will be short of required funds.