ECC approves revision of petroleum products prices on fortnightly basis

ISLAMABAD : Economic Coordination Committee (ECC) of the Cabinet has approved a proposal by the Ministry of Energy for revision of prices of petroleum products on fortnightly basis instead of the existing monthly basis. The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also gave go-ahead to a proposal by the Ministry of Industries and Production for import of up to 300,000 tonnes of refined white sugar to maintain buffer stocks and prevent any shortage of sugar in the coming months before the start of next crushing season. The ECC decided to adopt a revised pricing methodology for motor gasoline and high speed diesel on a fortnightly basis, based on Platts average, in view of its advantages for ensuring fair competition, alignment of margins with international pricing trend and smoothing out of volatility and distortions because of purchasing dates of one OMC. The revision of oil prices on fortnightly basis, coming into effect from 1st August 2020 subject to endorsement from the federal Cabinet, would also allow for planning for three months ahead with refineries and OMCs, better inventory management, better reporting of sales and enforcement of stock requirements, transparency and visibility of prices and reduced dependence on one OMC. As per the existing system, the prices of petroleum products are determined by allowing refineries to fix and announce the ex-refinery sale prices on a monthly basis subject to the condition that the ex-refinery price of the petroleum products cannot be more than the PSO’s average actual landed import price of previous months. The ECC also considered a proposal by the Ministry of Industries and Production for import of refined sugar by the Trading Corporation of Pakistan (TCP) to maintain buffer stocks, and allowed import of up of up to 300,000 metric tonnes of white sugar through a mode of procurement and other modalities to be decided by a three-member committee comprising Secretary Industries and Production, Secretary Commerce and Secretary Finance. The ECC also asked the Committee to seek input from the Law Division on the preferred mode of procurement and report to ECC in its next meeting. On a proposal by the Finance Division, the ECC approved upgradation of Habib Bank Limited representative office in Beijing to branch and remittance of RMB 300 million being capital of proposed branch from Pakistan. The ECC also allowed exemption from the Re-lending Policy of the Government of Pakistan a proposal by the Ministry of Climate Change for seeking AFD loan of USD 20 million as part of Emergency Assistance for Fighting against COVID-19 Pandemic for strengthening health workforce capacity, adopting infection minimization measures and supporting implementation of COVID-19 National Action Plan across Pakistan. The ECC also considered and approval a technical supplementary grant of Rs 340 million for the operationalization of Swat Motorway. The ECC also discussed a proposal by the Ministry of Energy for third-party access to LNG terminals to use excess capacity or government contracted-unutilized capacity, and approved the proposal for selling the un-utilized capacity.