ECC Okays Rs. 10 Billion for Liquidity Requirement of PSO

The Economic Coordination Committee (ECC) of the Cabinet on Tuesday allowed the release of Rs. 10 billion budgeted subsidy to the Petroleum Division and allowed government guarantee against bank financing of up to Rs. 50 billion for the liquidity requirement of Pakistan State Oil (PSO) for the import of LNG and petroleum products in the country.

Federal Minister for Finance and Revenue Senator Ishaq Dar presided over the meeting of the Economic Coordination Committee (ECC).

Petroleum Division tabled a summary on the liquidity requirement of PSO. It was submitted that PSO has been engaged in the import of LNG in the country to meet the deficit in gas demand and supply and is obliged to clear its financial obligations to the suppliers within the stipulated period.

In order to enable PSO to remain current in its payment obligations to LNG suppliers as well as to maintain the LNG supply chain, the ECC allowed the release of Rs. 10 billion budgeted subsidy to Petroleum Division and allowed government guarantee against bank financing up to Rs. 50 billion.

Sugar export

The Ministry of National Food Security and Research submitted a summary on the export of sugar during the year 2022-23 and presented the recommendations of the 4th meeting of the Sugar Advisory Board (SAB). The committee after detailed discussions on the recommendation of SAB, allowed 250,000 tons of sugar for export inclusive of the previously permitted 100,000 tons by the ECC on a first come first serve basis.

It further decided that the total quantity of export may be distributed among provinces based on their installed crushing capacity to be determined by Pakistan Sugar Mills Association (PSMA). The ECC further decided that dollar proceeds of exports will be recovered within sixty days of the letter of credit (LC) opening.

Funds for hospitals in Afghanistan

The Ministry of National Health Services, Regulation and Coordination (NHSR&C) submitted a summary regarding the transfer of amount to the Afghanistan government for three Pakistani hospitals in Afghanistan. The ECC after discussion approved the 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 Pakistani rupees.

As per the revised mechanism, the total amount already approved by the Cabinet for salaries i.e. Rs. 1.009 billion would be transferred to Afghanistan in four tranches. The first tranche is to be transferred by the Ministry of Finance to the Ministry of NHSR&C account. These funds would be transferred through the Ministry of Foreign Affairs and sent to the Pakistani Embassy in Kabul. The remaining three tranches would be transferred through banking channels to the embassy account opened for the purpose of disbursement of salaries for doctors and other staff working in hospitals in Afghanistan constructed and operated by Pakistan.

Extended well tested over Wali-1 Discovery

Petroleum Division presented a summary for extended well testing (EWT) over Wali-1 Discovery Wali (E.L) and submitted that an exploration license (EL) was granted over Wali Block to OGDCL and the company drilled an exploration well named Wali-1 and made a gas/condensate discovery in Lockhart Hangu and Kawagarh Formations. Extended Well Testing is a technical requirement to appraise the said discovery over Wali-1 exploration well drilled in Wali Block.

The committee after discussion allowed one-year EWT over the aid discovery w.e.f. start of production under EWT arrangements with condition that OGDCL will submit a Declaration of Commerciality (DoC) and Field Development Plan (FDP) over the Wali-1 discovery before the expiry of the allowed EWT period.

RLNG for fertilizer plants

The Ministry of Industries & Production submitted a summary on the diversion of RLNG to urea fertilizer plants up to 31st January 2023.  The ECC after deliberation decided to reject the proposal and decided that the RLNG supply to these plants would be discontinued with effect from midnight of 3rd January 2023.

Urea price fixation

The ECC deferred a summary submitted by the Ministry of Industries and Production tabled on price fixation of imported urea with direction to work out and submit a detailed mechanism of sharing of subsidies by provincial governments.

Federal Minister for Power Khurram Dastgir, Federal Minister for Commerce Naveed Qamar, Federal Minister for National Food Security and Research Tariq Bashir Cheema, former prime minister Shahid Khaqan Abbasi, Minister of State for Petroleum Musadik Malik, SAPM also attended the meeting.