ECC forms committee to negotiate wheat price with Russia

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday constituted a three-member committee to negotiate the price of wheat with the Russian government for further procurement.

Sources said planning and development minister Asad Umer, Commerce Adviser Razak Dawood and Trade Corporation of Pakistan Chairman expressed doubts over the wheat deal.

The meeting was told that the prices should be negotiated again because its sets the benchmark for future deals, according to sources. It was said if import price is high how it will be sold to local people on cheap price.

Last week, the committee allowed import of 180,000 tons of wheat from Russia under a government-to-government arrangement. The Trading Corporation of Pakistan (TCP) has also opened a letter of credit to import 330,000 tons of wheat and is in the process of tendering another about 1.2 million tons.

The TCP will distribute 110,000 tons each among three recipient agencies, including Pakistan Agricultural Storage and Services Corporation, Punjab and Khyber Pakhtunkhwa.

Private sector, TCP and government-to-government deals are encouraged to meet an estimated 2.2 million tons of shortfall this year. Private sector has already imported 430,000 tons of wheat and another 1.1 million ton was expected to be imported by the end of December.

ECC also deferred summary of increase in prices of essential food items at Utility Stores Corporation.

The committee also allowed new licences to compressed natural gas (CNG) stations after more than a decade to absorb surplus of imported regasified liquefied natural gas (RLNG).

The committee allowed Oil and Gas Regulatory Authority to issue new CNG licences to RLNG-based CNG stations with the provision that the licencee would neither receive indigenous gas or can claim for its conversion to indigenous gas. The ban on the issuance of new licences was imposed since 2008.

CNG consumption has dropped to 188 million cubic feet per day (mmcfd) from 392 mmcfd between 2009 and 2011.

Currently, two state-owned companies, Pakistan State Oil and Pakistan and Pakistan LNG Terminals Limited, are engaged in LNG imports. The terminals have 300 mmcfd excess capacity, according to an industry’s estimate. In FY2020, around 6.9 million tons of LNG were procured against nine million tons of import capacity.

Therefore, the government notified a framework for the import of LNG by private parties and sanctioned excess capacity available at LNG terminals to private importers.

ECC allowed Sui Northern Gas Pipelines (SNGPL) for the recovery of previous revenue shortfall and enabling SNGPL to manage the load of the domestic/ commercial sectors by diversion of RLNG in the approaching winter. ECC allowed allocation of 8 million metric cubic feet per day (mmcfd) of gas from Mangrio discovery and 4 mmcfd of gas from Mithri gas discovery for Sui Southern Gas Company.