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October 31, 2019

ECC approves 650,000tns of wheat for provinces

Business

October 31, 2019

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved release of 650,000 tons of wheat for Khyber Pakhtunkhwa, Sindh and Balochistan to ease out the demand and supply equilibrium in the local market.

The ECC took the decision during a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh.

Sources said the ECC of the cabinet woke up to brewing crisis on account of rising wheat flour prices in domestic market with wheat price having increased to an average Rs900 per 20 kilograms bag in recent weeks from Rs750. The decision was taken at a time when the Jamiat-e-Ulama-Fazal is heading towards Islamabad for Azadi march to protest against the government.

“The increased prices of flour usually turn into political crisis and so the government will have to keep close eye on brewing up crisis- like situation in the domestic market,” a top official confirmed with The News after attending the ECC meeting.

The ECC took up the wheat situation in the country, particularly the rising trend in wheat prices, and approved a proposal by the ministry of national food security and research for release of 300,000 tons each to governments of Khyber Pakhtunkhwa and Sindh and 50,000 tons to the government of Balochistan from Pakistan Agricultural Storage and Services Corporation (Passco) stocks.

The committee also approved Rs2.745 billion to be paid as Passco incidental charges at the ratio of 50:50 to be equally shared by the federal and respective provincial governments. The latest release follows an earlier release of 100,000 tons for Sindh and 150,000 for Khyber Pakhtunkhwa on an ECC decision earlier this month. The Passco incidental charges for the previous release had also been shared at the ratio of 50:50 equally by the federal and respective provincial governments.

Food ministry told the meeting that the Passco and provincial food departments had reported their stocks at 6.444 million tons as compared to 10.093 million tons a year earlier.

“However, despite the fact that the total availability of wheat was estimated at the level of 28.256 million tons, including the leftover stock of 3.777 million tons as compared to the national requirement of 26.91 million tons of the country, the prices of wheat and flour still showed upward trend in the local market,” an official statement cited the ministry as saying.

The ECC further constituted a committee under Minister for Economic Affairs Hammad Azhar to resolve, within two weeks, the issue of outstanding payments by Water and Power Development Authority (Wapda) and Pakistan State Oil (PSO) to Port Qasim Authority. Wapda owed Rs1.076 billion to Karachi Port Trust (KPT) after 52 consignments imported by the authority were cleared by the KPT board deferred payment. The meeting was told that Wapda had only paid Rs334 million as against Rs1.41 billion, while the remaining Rs 1.076 was still pending. The petroleum division owed Rs1.696 billion to the Port Qasim Authority for wharfage charges against the liquefied natural gas imported by the PSO.

The ECC also approved a proposal for grant of technical supplementary grant amounting to Rs706.050 million, including Rs650.426 million current and Rs55.624 million development expenditure, to the ministry of human rights in pursuance of a federal cabinet decision to transfer the functions of the special education and social welfare along with their allied institutions from federal education and professional training to the human rights division. Subsequently, the federal education and professional training division surrendered the funds of Rs706.050 million related to the special education and social welfare.

The ECC also approved a technical supplementary grant of Rs100 million, inclusive of Rs43 million for employee- related expenses and Rs57 million for operating expenditures, for revamping of different departments of the Islamabad administration.

The ECC was told that the Islamabad capital territory has already implemented the part of the approved summary dealing with the collection of taxes on increased rates and is way ahead of its revenue collection targets, while 125 new posts have also been agreed.

The ECC also took up an issue regarding the supply of gas to Habibullah Coastal Power Company (HCPC) and approved a proposal by the petroleum division for supply of indigenous gas for the interim period of 3 to 6 months, “purely on as and when available basis with no liquidated damages attached, to HCPC, during which period the supply of re-gasified liquefied natural gas could be evaluated together with commercial terms, if CPPA (Central Power Purchasing Agency) agreed to switch the plant on RLNG and extend the power purchase agreement accordingly”.

Petroleum division viewed that no long-term firm commitment of supply of indigenous gas to HCPC could be offered in view of the depletion of indigenous gas and the widening gap between demand and supply.

“However, considering the plant location of Quetta and voltage issues, the abrupt suspension of gas supply upon expiry of GSA (gas sales agreement) might not allow CPPA to make alternate arrangement to stabilise the grid which is neither in the interest of Balochistan nor the country,” the statement said.

The ECC further approved allocation of up to eight million metric cubic feet/day (mmcfd) gas from Chabbaro and up to 10 mmcfd gas from Gundanwari to the Sui Southern Gas Company with the price of gas as per the applicable petroleum policy.

The ECC further approved a uniform seasonal pricing structure of “use more electricity-pay less” to be applicable during the four winter months from November 2019 to February 2020, at the rate of Rs11.9 per unit on all units consumed over and above the units consumed in the corresponding months last year.

The committee extended the timeline by another one and a half year for the commencement of competitive market operations/commercial operation date of the competitive trading bilateral contracts market (CTBCM) to allow completion of CTBCM plan within 18 months after approval of CTBCM plan by National Electric Power Regulatory Authority (Nepra).

The ECC also approved the proposal for Nepra to be allowed to amend the timelines of market transition towards a competitive market operations/CTBCM operations mentioned in schedule-I of the Nepra (Market Operator Registration, Standards and Procedure) Rules, 2015.

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