ECC weighs paying Rs61bln to SSGC for gas supply to PSM

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet is considering a proposal to clear Rs61 billion dues of Sui Southern Gas Supply Company (SSGC) to resume supply to Pakistan Steel Mills (PSM), it was learnt on Tuesday.

The ECC is meeting today (Wednesday) to consider a summary submitted by the ministry of industries and production, asking for settlement of dues of SSGC for the continuation of gas supply to the PSM.

Two weeks back, SSGCL warned the management of the loss-making mills that blasted a massive layoff recently and the federal government that it would disconnect the gas supply in case of unpaid dues. Currently, the SSGC payment outstanding against the mills stands at Rs61 billion.

The meeting is likely to allocate gas to SSGCL from three new discoveries of Pakistan Petroleum Limited (PPL) to help boost supplies and overcome gas crisis. The gas utility will get 10 million metric cubic feet per day (mmcfd) from PPL’s Gambat south block in district Sanghar, 10 mmcfd from HADAF X-1, and 9.5 mmcfd from Benari X-1.

For the textile sector, the ministry of commerce has asked for making the import of raw materials less costly. It has asked to abolish regulatory duty on import of cotton yarn till end-June 2021. Cotton production fell around 44 percent against the target of 15 million bales. The shortage is posing a challenge to the textile sector. Since the sector has tons of export orders, the industry has already started import of cotton and cotton yarn. Textile is the major foreign exchange earner and job creator in Pakistan.

Currently, the industry is meeting more than a third of its demand through imports of cotton and cotton yarn. There are more export orders after easing of lockdown related to coronavirus. Recently, the sector has approached the commerce ministry to facilitate imports of raw materials by removing some levies on them.

The ministry of commerce submitted a summary to the ECC seeking removal of regulatory duty on cotton yarn import till end-June 2021. Withdrawal of regulatory duty on import of cotton yarn will encourage industrialists to import more and easily meet the demand. It would also cut the cost of production.

Moreover, the ECC is considering a procedure to the registration under the concessionary regime of electricity, re-gasified liquefied natural gas, and gas under the export-oriented sector (zero-rated sector). These include textiles (including jute), carpets, leather, sports, and surgical goods.

The meeting is also considering proposals related to conversion of National Highway Authority loans into government grants or their outright waiver; nomination of Utility Stores Corporation as recipient agency for sugar imports and Karachi transformation plan.