ISLAMABAD The Government on Thursday sowed the seeds of utilities prices disparity across the country after partially liberalising the pricing mechanism for the domestic prices of the petroleum products. A senior government official told TheNation requesting anonymity that this would lead to different prices of utilities including electricity etcetera, in various parts of the country. The day is not too far when the people from the Khyber Pakhtunkhwa would demand a different price of the hydro electricity, he observed commenting on deregulation of inland freight equalisation margin (IFEM). The official feared that deregulation of IFEM would result in different prices of petroleum products in different parts of the country according to the freight cost calculated by the individual marketing companies. Precisely speaking there would be hardly check on the domestic petroleum prices in different areas of the country, he added. This experiment, he said, would lead to provoke the people of the Khyber Pakhtunkhwa to ask for a different price of the hydroelectricity being produced in their provinces. This was for the third time that the Economic Coordination Committee of the Cabinet had deferred the two crucial issues including the deregulation of the domestic petroleum prices and re-award of the LNG import project. According to the official, either the Finance Ministry was in the way of deregulation proposed by the Ministry of Petroleum and Natural Resources or the latter itself was not clear about its summary proposal. That is why, he maintained, the ECC is again and again deferring these two most important issues. Meanwhile, the Finance Ministry issued a vague statement about the pricing formula stated, While reviewing the petroleum products pricing formula and to bring it in line with the recommendations of the Bhagwandas Commission Report, the ECC gave its approval to the revised formula for the deregulation of inland freight equalisation margin (IFEM) for petroleum products. It is pertinent to state here that Bhagwandas Commission Report had suggested deregulation of three products pricing including that of JP-4, HOBC, and Light Speed Diesel Oil. On the other hand, the official told TheNation that the Ministry of Petroleum had come up with a proposal to deregulate prices of all the six conventional petroleum prices including supreme petroleum, kerosene, and high speed diesel oil in addition to the IFEM. According to the Finance Ministrys statement, the ECC also approved the revised investment criteria for establishment of new Oil Marketing Companies by bringing it back to the March 2006 level. It prescribed an investment of Rs 500 million with equity at Rs 100 million for setting up of an OMC. The ECC also desired that the law governing OGRA might be amended to allow OGRA to oversee the deregulated framework. The ECC approved the generic criteria for declaring an industry as a pioneer industry in the country. According to the approval, the concept of pioneer industry shall not be associated with reference to the product rather than technology to be used with a 20 percent minimum value addition benchmark. The Committee also prescribed that the pioneer industry would be least dependent on imports, it would have Vertical Integration and would be foreign exchange neutral. The ECC also accorded ex post facto approval regarding the bearing of the exchange risk by the Federal Government for NWFP (Khyber Pakhtunkhwa) Structural Adjustment Credit (SAC) No 3687-Pak. In order to increase the credit limits of farmers on an across the board basis, the ECC approved the enhancement of present value of the Produce Index Unit (PIU) from Rs 1,200 to Rs 2,000 for the middle level of pills. This base would be used for upward adjustment of all categories of pills. In order to make the 32 buses of Swede Bus Company (SBCL) roadworthy, the ECC granted one time exemption of the SRO No 812 (I)/99 dated 1.7.1999 which prohibited their further sale. The ECC also satisfied itself on observance of PEPRA Rules by NFML and accorded ex post facto approval for transportation of 721,737.75 M Tons/14,434,755 bags of urea at the rate of Rs 96.90 per bag amounting to Rs 1,398,727,760 subject to actual claim after reconciliation with TCP.