ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Friday approved a proposal to deregulate the margins on High-Speed Diesel (HSD) for the Oil Marketing Companies (OMC) and dealers under the policy of liberalisation and deregulation.

Prime Minister Shahid Khaqan Abbasi yesterday chaired a meeting of the ECC of the Cabinet at the PM Office. The ECC also approved a proposal to deregulate the margins on HSD for the OMC and dealers under the policy of liberalisation and deregulation. The impact of the policy would be reviewed after three months. It was also decided that OMCs would add Fuel Marker in HSD within six months at depot stage to avoid adulteration.

It was decided that Oil and Gas Regulation Authority (Ogra) would develop a mechanism to monitor the OMCs commercial stock position, the dealers’ inventory system and Fuel Marker System. Sources informed that Petroleum Division has addressed concerns of the Ogra and Planning Division about planned deregulation of margins on HSD sales for oil marketing companies (OMCs) and dealers. The Planning Division and Ogra had opposed the deregulation which forced the ECC in its last meeting to put off decision on a summary sent by the Petroleum Division.

The Petroleum Division had recommended an increase of Rs0.14 per litre in margins on petrol and diesel for the OMCs. For the dealers, it proposed an increase of Rs0.19 per litre and Rs0.16 per litre, respectively. The meeting approved a proposal submitted by the commerce ministry to allocate additional quantity of 12 million kilograms of surplus tobacco to all the tobacco companies and dealers on pro-rata basis.

The ECC provided a provisional approval of the issuance of government of Pakistan’s sovereign guarantee for Rs39,000 million for construction of 2X660MW Coal Power Project Jamshoro, subject a third part evaluation especially pertaining to demand and supply situation.

The ECC also extended the period of provision of subsidy to agricultural tube-well consumers in Balochistan till December 31, 2017 subject to commitment of past payments by all concerned/stakeholders on same terms and conditions as approved earlier by the ECC on June 17, 2015. The approval is linked with a comprehensive review of solarisation of the tube-wells to be undertaken on a priority basis in order to save electricity bills and the subsidy being provided by the federal and the provincial governments. The need to put in place efficient irrigation methods likes drip-irrigation, were also emphasized by the meeting.

The ECC approved a summary for extending the period of applicability of reduced rate of 0.4 percent advance income tax on banking transactions of non-filers under section 236P of the Income Tax Ordinance 2001 up to December 2017. In order to promote exports, the ECC approved a proposal that 50 percent of the export package incentive for eligible textile and non-textile sectors, announced in Prime Minister’s Export Package, be provided on the same terms as for the period January to June 2017 without condition of increment. Remaining 50 percent of the rate of incentive would be provided if the exporter achieves an increase of 10 percent or more in exports as compared to the corresponding period of the last year. It was also approved that an additional 2 percent drawback would be provided for export to non-traditional markets. Besides, expeditious settlement of payments claims by the State Bank of Pakistan was also approved.

Various measures for rationalisation of imports and reducing the import bill were also suggested by Commerce division and Federal Board of Revenue. The detailed lists of import items would be reviewed and finalised.