Economic Coordination Committee of the cabinet (ECC) on Thursday ordered re-tendering for purchase of 200,000 tonnes of sugar, banned import of CNG cylinders and conversion kits and their installation in new vehicles, and also banned export of POL products to Afghanistan and Central Asian Republics. The meeting of ECC was held under chairmanship of minister for finance Dr Abdul Hafeez Shaikh. An official source said to the surprise of committee members. Chairman Pakistan Sugar Mills Association (PSMA) Javed Kayani was again present in the meeting to lobby for the association for the purchase of sugar from local sugar mills. Ministers were concerned over Kayani’s presence again as under the rules no outsider could participate in ECC meeting.
Kayani stressed upon the committee to approve the already negotiated price with PSMA so that the process could be started to make payment to farmers. However, the committee rejected his intervention and directed re-tendering for the procurement. It was decided that the bench mark price on the opening day of the tender would be the wholesale price of sugar in commodity market. It was decided that all sugar mills will be invited for the tenders instead of PSMA and up to 10,000 tonnes will be procured from each mill at the finalised rate. It was also decided that the mills failing to supply sugar will be imposed with a hundred per cent penalty.
The sub committee formed after last ECC meeting submitted its recommendations which lowered sugar purchase price from Rs63 to Rs53.73 per kg. It proposed elimination of 3.5 per cent withholding tax on sugar to be procured from local sugar mills. Both recommendations were accepted by the committee, the source said. According to the official statement, ECC decided that purchase of sugar will be re-tendered with certain modifications in tender terms and conditions. The committee directed TCP to issue a gall-up tender and finalise the process within next two weeks. ECC was of the opinion that the blacklisted sugar mills will be also allowed to bid in the tender provided they deposited the penalty to TCP. This decision was made in good spirit so that a level playing field was provided to all mills. ECC also approved ban on import of CNG cylinder and conversion kits in the wake of current gas shortage in the country. Installation of new CNG kits in vehicles will also be banned. Manufacturers were allowed to use their existing stock of kits and cylinders. However, CNG fitted public transport vehicles buses and vans are exempted from this moratorium. An official source explained that ministry of petroleum was attempting to convert CNG users to LPG; as CNG kits and cylinders were not manufactured locally, their ban will shift people to LPG.
ECC reviewed its previous proposal of monthly natural gas load management programme on SNGPL system, and decided to withdraw the previous approval of supply of 76 mmcfd gas to IPPs because of severe shortage of gas in coming months and to enhance gas supply to fertiliser plants. It also approved energy efficiency audit of fertiliser plants and ban of POL product export to Afghanistan and Central Asian Republic, proposed by ministry of petroleum. The committee was informed that the actual conditions were quite different as the export was only on papers and all POL products were being sold in the country. The committee discussed proposal of ministry of industries for import of urea for Rabi Season 2011-12. It was informed that import requirements of urea were 700,000 tonnes against demand of 3.4 million tonnes during Rabi season, out of which 200,000 tonnes have already been imported. Minister for petroleum said import requirements would further increase due to short supply of gas in coming two months. ECC discussed the proposal at length and decided to meet the remaining shortage of urea for Rabi 2011-12. Finance Minister inquired about formula on the basis of which gas was provided to fertiliser plants and took exception that certain plants did not lower prices of their products. He expressed concern over pricing regime and subsidy provision and directed that a proper distribution mechanism be identified. A committee was formed headed by minister for petroleum including Secretaries of Water of Power, Production, Finance, Food Secretary, Industries and Deputy Chairman Planning Commission, to deal with fertiliser companies for fixation of urea price. The committee will report to ECC in three to four days. Committee also deliberated upon distribution of available and imported urea, and directed concerned ministry to ensure the pricing regime for the urea. And in this regard the line ministry was asked to have a meeting with dealers of urea in the provinces to have a unified price in the market so that the farmers should get the subsidised price. It was decided that hoarding of fertiliser be curtailed by the dealer to avoid fluctuation in urea price.
