ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved export of 30,000 MT of sugar to Tajikistan at a price differential of US $20 per MT below the international market price and also allowed de-regularising high speed diesel (HSD) ex-refinery price with the assurance that its benefit would reach to end consumer.

The ECC met under the chairmanship of Federal Minister for Finance and Economic Affairs, Dr Abdul Hafeez Shaikh.

With reference to ECC’s earlier decision on export of 30,000 MT of sugar to Tajikistan on government-to-government basis from TCP reserves at a price differential of US $ 20 per MT below the international market price on August 13 last, the commerce ministry informed ECC that the Tajik side had requested Pakistan government to bear the cost of inland transportation contending that international prices were generally quarterly quoted on “free on board” or “cost and freight” basis.

In view of above, commerce ministry requested the ECC to approve sugar export to Tajikistan in which transportation cost would be borne by the Pakistan government. After evaluating different aspects of summary regarding price adjustment after bearing transportation cost and the bilateral relations between the two countries, ECC approved export of sugar to Tajikistan on the same rate as decided earlier with transportation cost to be borne by the government as proposed by the Ministry of Commerce.

ECC also discussed a summary proposed by Ministry of Petroleum and Natural Resources on the deregulation of high speed diesel (HSD) ex-refinery price. Secretary Petroleum informed ECC that currently 93 per cent of HSD was being imported by PSO while 7 per cent was being produced by local oil refineries. PSO import price and local refinery HSD price as per formula did not match and fluctuate.

This had created a disparity for small OMCs, who entirely depended on local refinery supply, because they could not import HSD due to their capacity/infrastructure constraints. The price of a local refinery HSD remained higher most of the time, consequently smaller OMCs were compelled to market HSD at the cost of their margin, the secretary informed the ECC. After due deliberation, ECC allowed to de-regularise HSD ex-refinery price with the assurance that its benefit would reach to end consumer.

ECC also approved procurement of additional quantity of 10,000 MT sugar (over and above the approved quantity of 200,000 MT) by Trading Corporation of Pakistan (TCP) in order to compensate eight sugar mills which were affected due to decrease in their normal quota.

It may be mentioned that Sindh High Court had instructed TCP to allocate 10,000 metric ton for procurement from M/S Adam Sugar Mills after hearing a case filed by the same. To ensure compliance to the orders of the court, TCP issued acceptance letter to M/S Adam Sugar Mills Ltd for procurement of 10,000 MT sugar out of the quota deducted from remaining eight sugar mills on pro-rata basis. The decision will compensate the affected sugar mills.

ECC also discussed a summary moved by Ministry of Petroleum proposing lifting of ban on import of CNG cylinders and conversion kits for which L/C had been opened or bank agreement as per State Bank regulations had already been concluded before 31st December 2011. Moreover, it was proposed that the import of parts/components of CNG kits might be allowed for export-oriented business of CNG conversion kits.

After detailed discussion it was decided that the concerned ministry would provide further data on the revenue being earned by export of locally manufactured CNG kits and an appropriate decision would be made on the basis of facts and figures.

In the end Secretary Finance briefed the ECC over the review of price situation, position of commodities stock and latest economic indicators in the country. The ECC was informed that the CPI was 9.3 per cent in 2012-13, while SPI and WPI were 7.9 per cent and 7.5 per cent respectively.

Agencies add: The Economic Coordination Committee at its meeting also approved fixing of prices in future by the oil companies instead of Ogra.