Govt to revise oil prices every week

* ECC approves sale of wheat to sanctions-hit Iran

* Allows import of 0.3m tonnes of urea for next crop

By Sajid Chaudhry

ISLAMABAD: Despite opposition by the Finance Division, the Economic Coordination Committee (ECC) on Tuesday allowed the government to review petroleum prices on a weekly basis on trial basis.

The ECC also approved import of 0.3 million tonnes of urea for the next crop. A meeting presided over by Finance Minister Dr Abdul Hafeez Sheikh was informed that due to gas shortfall five of ten urea plants had been shut down and there was no hope of gas restoration in the near future and urea shortage needed to be met through import.

They said a proposal by the Industries Ministry was for importing 0.6 million tonnes of urea either for Kharif of Rabbi crops as well as suggestion to reduce price of imported urea from Rs 1,600 to Rs 1,450 per 50kg bag. However, the ECC allowed import of 0.3 million of urea and also decided that there would be no change in the existing pricing formula.

Sources said the ministry contended that the urea import was critical to maintain strategic reserves of around 0.5 million tonnes to discourage hoarding and black marketing.

Sources said the Finance Ministry had opposed the summary, seeking fixation of POL prices on weekly basis. The ECC approved in principle the removal of high octane blending component (HOBC) from inland freight equalisation margin (IFEM) regime, subject to consultation and endorsement from the Law and Justice Ministry. The meeting was informed that with the removal of IFEM for HOBC, the ex-depot prize of HOBC would vary from location to location across the country contrary to other oil products.

Sources said the Finance Ministry had some reservations on the proposed structure of import of LNG. The ministry has objections over the proposed establishment of subsidiary in the public sector for facilitating import as the earlier proposal was to leave the import matter on private sector.

On a summary of the Petroleum Ministry regarding import of LNG, the ECC approved long-term liquefied natural gas (LNG) import framework by the the Petroleum and Natural Resources Ministry. The ECC formed a technical group consisting of the secretaries of petroleum, finance, water and power.

According to a statement, the ECC approved import of furnace oil by the Pakistan State Oil (PSO) under term contract and directed the Petroleum Ministry to work for detailed calculations on the subject in consultation with the Finance Ministry. The matter of terms of settlement with IPPS regarding delays in payments by power purchaser under power policy 2002 was also discussed by the ECC. The meeting approved the payment scheduled of Rs 24 billion which was overdue for more than 45 days, as proposed by the Water and Power Ministry. The ECC also formed a committee, comprising of the secretaries of petroleum, finance and the Planning Commission deputy chairman to work on other matters of the said proposal.

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