ISLAMABAD - Apart from approving increase in margin of oil marketing companies, the Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved an interim business plan for Pakistan International Airlines Corporation (PIAC) for the next five years.

The Economic Coordination Committee (ECC) of the Cabinet met here Tuesday under the chairmanship of Federal Minister for Finance and Economic Affairs, Senator Saleem H Mandviwalla. The ECC approved an interim business plan presented by PIAC for the next five years and agreed to allow Ministry of Finance to issue continuing fresh guarantees to the tune of Rs 49 billion during the year 2013 to meet with the critical liquidity condition of the Corporation. ECC also agreed to the request of the M/o Defence for arrangement/provision of $46 million by M/o Finance with or without GoP guarantees enabling PIAC to acquire five narrow body aircrafts to replace its ageing fleet.

The ECC also agreed to the proposal for extending the loans/guarantees of Rs 33.5 billion until June 2013. The ECC further agreed to the borrowing by PIAC of Rs 13.50 billion from NBP against letter of comfort to be subsequently replaced by GoP guarantees. The approved measures/ strategy will provide for fuel efficiency through fleet modernization, optimum fleet deployment on network, introduction of additional frequencies on high demand high yield routes, revenue enhancement and increase in market share, separation of the core airlines business activities from non core (SBUs) and restructuring of PIA liabilities to reduce financial cost.

Ministry of Petroleum and Natural Resources submitted a summary seeking review of oil marketing companies (OMC) and dealers’ margins in pursuance of the ECC decision for its review on yearly basis. The ECC approved the margin for oil marketing companies and dealers to be increased by Rs. 0.10 per litre on high speed diesel. OMCs profit on petrol increased from Rs 0.25 to Rs 2.23. Meanwhile, OMC’s profit on diesel enhanced from 0.10 to Rs 1.86.

M/o Petroleum and Natural Resources submitted a summary before the ECC seeking its approval for the recovery of PARCO claims from freight pool (IFEM). The ECC in this regard directed OGRA to continue with the implementation of earlier ECC decision dated 16th August 2011 and reimburse the price difference to PARCO as per existing practice.

M/o Petroleum and Natural Resources moved another summary seeking approval of the Economic Coordination Committee to the formula for fixation of ex-refinery price of high speed diesel (HSD). The ECC approved the proposed mechanism/formula for computation of HSD price due to change of benchmark price from HSD 0.5 sulphur to HSD 0.5% Sulphur (Euro-II) which will remain in force till June 30, 2014. The ECC banned the marketing of high speed diesel with sulphur content more than 0.5 per cent (Euro-II) grade high speed diesel in the country.

The M/o Petroleum and Natural Resources solicited the approval of the ECC for allocation of gas from new sources. The ECC agreed to the proposal for allocation of first 20MMCFD gas from SSGC share from new discoveries to 100 MW Nooriabad Industrial Estate power plant as requested by the Government of Sind. The ECC further directed that the allocation of the said gas from SSGC should be placed at the disposal of M/o Water & Power till the power plant at Nooriabad Industrial Estate gets operational.