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Govt to spend Rs225bn on wheat procurement

ISLAMABAD: (Parliament Times) The government on Tuesday decided to purchase Rs225 billion worth of 7.05 million tonnes wheat, allow export of 200,000 tonnes of sugar and to pay one-month salary to Pakistan Steel Mill (PSM) employees.

The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by Finance Minister Ishaq Dar. The meeting also allocated 200 million cubic feet per day (mmcfd) gas to Guddu Power Station, extended 0.4 per cent withholding tax on non-filers and changed testing parameters for oil products.

The meeting was informed that the federal cabinet had approved minimum guaranteed price of wheat at Rs1,300 per 40 kg in December 2016 for 2016-17 crop for strategic reserves and supplies to deficient provinces and areas. Last year too, the government had set wheat procurement target of 7.05 million tonnes but actually the public sector could procure only 5.8 million tonnes because of previous year’s carryover stock and low exports despite rebate offered by the government.

ECC approves export of 0.2m tonnes of sugar, one-month salary for PSM employees
It was also reported that around six million tonnes wheat was still available in public sector stock and hence all the stakeholders have again agreed to a procurement target of 7.05 million tonnes. This would include Punjab’s 4.5 million tonnes at a cost of Rs130.4bn, followed by Sindh’s 1.2 million tonnes for Rs39bn and Passco’s 0.9 million tonnes for Rs37.5bn. Khyber Pakhtunkhwa would spend Rs10bn to procure 350,000 tonnes of wheat while Balochistan would purchase 100,000 tonnes at a cost of Rs8bn.

The ECC approved the summary presented by Ministry of National Food Security and Research for public sector procurement of wheat and set a target of 7.05 million tonnes involving financial requirements Rs224.86bn.

SUGAR EXPORT: The ECC finally budged to an advertisement campaign of the sugar industry and allowed export of 200,000 tonnes of the commodity within two months.

An announcement said the ECC approved a proposal of the Ministry of Commerce for further export of 200,000 tonnes of sugar without any subsidy. The export of sugar would be made within 60 days after approval of export quota by State Bank of Pakistan or by May 31 whichever is earlier. Export would be allowed to only those mills which have cleared outstanding dues of farmers relating to last season and have crushed at optimum capacity.

It may be recalled that ECC in December 2016 had allowed export of 225,000 tonnes sugar till March 31, 2017 with the condition that the Inter-Ministerial Committee led by commerce minister, constituted by the Prime Minister’s Office in November 2015 to monitor sugar prices and recommend to ECC stoppage of further export if domestic price of sugar was negatively impacted.

The ECC also approved extension in applicability period of reduced rate of withholding tax ie 0.4pc, for non-filers up to June 30.

Approval was also accorded for disbursement of one-month’s (December 2016) salary amounting to Rs380m for PSM employees.

The ECC also approved supply of 200mmcfd of natural gas to refurbished Thermal Power Station Guddu. It approved the allocation of 150mmcfd to Guddu, including 100mmcfd directly through Pakistan Petroleum Ltd (PPL) and 50mmcfd through Sui Northern Gas Pipeline Limited which expired on May 7, 2013.

Further, PPL will supply 50mmcfd additional gas along with 150mmcfd, directly to Guddu plant from June 17 or the date of commissioning of new pipeline whichever is earlier. The entire 200mmfcd direct gas supply would be subject to minimum 72.5pc take-or-pay quantity. The meeting also directed reconciliation and payment of outstanding receivables against supply of gas to Guddu forthwith.

The meeting also approved petroleum ministry’s request for changes in existing procedures for sampling and testing of imported petroleum products. The quality of the product for all importers shall be tested by Hydrocarbon Development Institute of Pakistan (HDIP) laboratory prior to unloading.

Sampling of the product for quality analysis would also be carried out by HDIP in the presence of importer’s surveyors. In case of quality dispute if the sample testing by HDIP fails, re-sampling would be made by a third party surveyor in the presence of authorised representatives of concerned stakeholders including HDIP.

The fresh sample, so taken, would be tested in the presence of nominate representatives of the importer and HDIP by another independent laboratory, pre-approved by the Oil and Gas Regulatory Authority (Ogra). Test results of fresh sample would be final and binding.

Further, Ogra shall also independently carry out random sampling from vessels carrying imported petroleum products for testing through any of the approved laboratories for effective monitoring, quality assurance and greater transparency in the process.

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