Islamabad: The Economic Coordination Committee (ECC) of the cabinet approves export of 150,000 tonnes additional sugar. It also approves disbursement of Rs60Bn to the Pakistan State Oil PSO to address its liquidity and supply chain challenges.
The sugar mills could export sugar on a first-come-first-served basis. The ECC meeting learnt of the inconsistencies in the sugar data released by the provinces. And that the Federal Board of Revenue and the provinces were constantly changing consumption and production figures.
The ECC also decided that the total quantity of export should be distributed among provinces. And the distribution should be based on the installed crushing capacity of the provice. The committee assigned the task to Pakistan Sugar Mills Association.
The export would also be subject to the payment conditions. It is decided that the proceeds in dollars would be recovered from sugar exporters. And that the payments will be made within 60 days from when the LCs are opened.
The ECC approved export of a total of 250,000 tonnes of sugar on the recommendation of the Sugar Advisory Board. It incudes the 100,000 tonnes already approved on Dec 15. The board is led by Food Minister Tariq Bashir Cheema.
The committee also decided to discontinue the subsidized supply of regasified liquefied natural gas (RLNG) to two Punjab-based fertilizer plants.
Disbursement To Energy Suppliers
The committee also approved a Rs60bn financial arrangement for PSO. The committee deliberated to disburse Rs10bn as a budget subsidy. While Rs50Bn through bank financing against a federal government guarantee. The meeting hopes that the national fuel supplier can meet its international payment obligations to Qatar and maintain the LNG supply chain.
PSO had to arrange about $450M every month for LNG imports. But a major part of the gas cost remained stuck with the southern and northern Sui gas companies — SSGC and SNGPL — because of insufficient payments by the power sector and massive gas diversions to heavily subsidised sectors like the export industry, fertiliser and residential.
While PSO had to make payments to LNG suppliers on the 15th of each month. Its total receivables had gone beyond Rs620bn. Similarly, SNGPL owed about Rs385Bn to RLNG suppliers, including Rs250bn to PSO and Rs135bn to Pakistan LNG Limited.
The meeting was told that PSO’s funding requirements on account of LNG stood at Rs355bn in November but had jumped to Rs447bn in January and would cross Rs548bn by March — the final winter month.
The ECC rejected a proposal by the industries and food ministries to continue subsidised LNG to two fertiliser plants with a Rs26bn supplementary grant for subsidy.
Instead, the committee decided that the RLNG supply to Fatima and Agritech fertiliser plants in Punjab would be discontinued with effect from Jan 3 midnight amid a gas shortage.
The meeting was told that with no gas availability to these plants in January, the urea buffer stock would halve to about 100,000 tonnes, whereas continuing with subsidised gas was estimated to produce about 65,000 tonnes this month.
The ECC approved a revised mechanism and modalities for transferring funds to Afghanistan under a Rs5bn assistance announced by Pakistan to Afghanistan in October 2021.