Seeking dollars: Govt okays export of additional 0.15m ton sugar
With the government desperate for inflow of US dollars, it approved on Tuesday a proposal to export an additional 150,000 metric tons of sugar even as it set new condition for recovery of dollars for every export letter of credit.
Moreover, a crisis in agriculture could be created after it was decided to stop diverting RLNG to urea plants.
This was decided on Tuesday during a meeting of the Economic Coordination Committee (ECC) of the federal cabinet. The meeting was held in Islamabad on Tuesday with Federal Finance Minister Senator Ishaq Dar in the chair.
Others who attended the meeting included Federal Power Minister Khurram Dastgir Khan, Federal Commerce Minister Syed Naveed Qamar, Federal Food Security and Research Minister Tariq Bashir Cheema, former prime minister and MNA Shahid Khaqan Abbasi, Minister of State for Petroleum Musadik Masood Malik, SAPM on Finance Tariq Bajwa, SAPM on Government Effectiveness Dr Jehanzeb Khan, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal, federal secretaries, senior officers attended the meeting.
During the meeting the Ministry of National Food Security and Research submitted a summary for the export of sugar during the ongoing fiscal year 2022-23.
The recommendations of fourth meeting of Sugar Advisory Board (SAB) was presented in the meeting.
After detailed discussions on the recommendations, the forum allowed the export of 250,000 tons of sugar for the ongoing fiscal year.
This would include the export of 100,000 tons of sugar approved by ECC towards the end of December.
The ECC further decided that the total quantity of sugar to be exported should be distributed amongst the provinces based on their installed sugar crushing capacity. This would be determined by Pakistan Sugar Mills Association (PSMA).
The forum further decided that dollar proceeds of exports will be recovered within 60 days of the letters of credit being opened.
During the meeting, the the Industries and Production Ministry submitted a summary over the diversion of Re-Gassified Liquefied Natural Gas (RLNG) to Urea fertilizer plants for the entirety of January.
After due deliberation, the ECC decided that RLNG supply to these plants will be discontinued from mid night on January 3, 2023.
This could have far reaching consequences on agriculture in the country.
The ECC deferred a summary submitted by Ministry of Industries and Production tabled on price fixation of imported Urea with direction to work out and submit detailed mechanism of sharing of subsidy by provincial governments.
Funds for import of fuel
The Petroleum Division tabled a summary seeking liquidity of funds for state-run Pakistan State Oil (PSO) for the import of Liquefied Natural Gas (LNG) and other petroleum products.
The summary stated that PSO has been importing LNG to help Islamabad bridge the gap between demand and supply in the domestic market.
PSO stated that it is obliged to clear its financial obligations of suppliers within a stipulated period.
To enable PSO to remain current in its payment obligations to LNG suppliers, as well as to maintain LNG supply chain, the division demanded release of funds.
After deliberating on the matter, the ECC okayed the release of Rs10 billion of budgeted subsidy for the Petroleum Division.
Moreover, the forum approved sovereign guarantee against bank financing of upto Rs50 billion.
Salaries for staff in Afghanistan
The Ministry of National Health Services, Regulation and Coordination submitted a summary seeking the transfer of funds to Afghanistan to pay salaries of staff and for other expenses pertaining to the functioning, maintenance, equipment, at the three hospitals in Afghanistan that were built, operated and maintained by Pakistan.
After due discussion, the ECC approved a revised mechanism for the transfer of funds to Afghanistan as proposed by the Afghanistan Inter-Ministerial Coordination Cell (AICC) with direction to attempt to release the amount in rupees.
Under the revised mechanism, the government will transfer Rs1.009 billion, which has been approved by the cabinet.
This sum will be transferred to Afghanistan in four tranches.
The first tranche will be transferred by Ministry of Finance to the health ministry’s account for onward transfer.
These funds would then be transferred to Afghanistan via the Ministry of Foreign Affairs to the Pakistan Embassy in Kabul.
The remaining money will be transferred through banking channels into the embassy’s account, which has been specially opened for disbursing salaries for doctors and other staff working in hospitals in Afghanistan constructed and operated by Pakistan.
New well in Wali block
The Petroleum Division presented a summary seeking extended well testing (EWT) for the Wali-1 Discovery Wali.
The division stated that an exploration licence (EL) was granted over Wali Block to the Oil and Gas Development Company (OGDCL) and the company had drilled an exploration well Wali-1.
The dril was successful and gas/condensate discovery was made in Lockhart Hangu and Kawagarh Formations.
The EWT was deemed a a technical requirement to appraise the discovery.
After discussion, the ECC allowed the EWT for a year to aid the discovery from start of production under EWT arrangements.
The OGDCL, however, was bound to submit Declaration of Commerciality (DoC) and Field Development Plan (FDP) over the Wali-1 discovery before expiry of allowed EWT period.