ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Monday approved export of 0.3 million tonnes of urea fertiliser till 28th of April 2017 without any subsidy.

The ECC chaired by Finance Minister Ishaq Dar also endorsed Prime Minister Nawaz Sharif's decision to continue the fertiliser subsidy scheme for the ongoing financial year (2016-17) on same terms, conditions and modalities. The government is giving Rs200 per bag subsidy to support the farming community and the agriculture sector.

A few days ago, the government withdrew the cash subsidy on fertiliser sales that was announced in the budget for the ongoing financial year 2016-17. The government had given subsidy worth Rs390 billion on urea, including cash subsidy of Rs156 billion, reduction in GST worth Rs184 billion and price reduction of Rs50 by manufacturers.

The price of urea had been reduced to Rs1,400 from Rs1,790 per bag following the announcement of the subsidy. The government, in a recent decision, withdrew the cash subsidy. The government had also withdrawn the cash subsidy of Rs300 per bag on DAP fertiliser. Later, due to the pressure of the opposition political parties and farmers, the government restored the subsidy.

The top economic decision-making body of the country has also approved export of 0.3 million tonnes of urea fertiliser without any subsidy. The government is providing Rs200 per bag subsidy; however, this subsidy will not be available on exports of fertiliser.

The ECC was informed that there was 1.7 million tones of urea stock with fertiliser companies, including 0.27 million tonnes of imported urea, with the National Fertilisers Marketing Limited. Similarly, the government is expecting new urea production of 2.59 million tonnes, which makes the total availability of urea at 4.32 million tonnes. The expected utilisation of urea in Rabi season is around 3.3 million tonnes against the overall availability of 4.32 million tonnes, leaving one million tonnes in surplus.

The Ministry of Commerce has recommended the ECC to allow urea export with certain conditions, including registration of an export contract with the Trade Development Authority of Pakistan, and allow export till April 28, 2017. The Fertiliser Review Committee (FRC) will meet after April 28 to review exported quantities.

The State Bank of Pakistan will monitor the export quantity like the mechanism adopted for sugar exports. The Fertiliser Review Committee (FRC) will monitor domestic prices of urea on a monthly basis and in case of an abnormal increase in retail price as per weekly sensitive price index, the FRC will recommend to ECC discontinuation of further exports. The permission for export was given in view of around one million metric tonnes of surplus urea fertiliser in the country.

The ECC approved, in principle, payment of outstanding claim of PASSCO on account of supply of wheat in 2008-2009, and directed the Ministry of National Food Security & Research and PASSCO to reconcile the outstanding amount with the Ministry of Finance.

The ECC recognised the contributions and services of recently retired Dr Waqar Masood Khan and Nisar Muhammad, both as ex-officio participants of the ECC and as secretary of Finance Division and secretary/chairman of Revenue Division/FBR, respectively.