ISLAMABAD, Aug 24: The Economic Coordination Committee (ECC) of the cabinet on Tuesday decided to keep the domestic oil prices stable despite a rising global trend to arrest inflation and protect the common man from its negative impacts.

Presided over by Finance Minister Shaukat Aziz, the ECC was informed that despite the increase in oil prices in international markets, no raise had been made in the domestic oil prices.

The government had been absorbing the difference in oil prices and this practice would continue for the time being to maintain oil prices stability, the minister added.

The meeting was informed that two ships carrying 95,000 tons of wheat would arrive at the Karachi port in September which would help stabilize the domestic flour and wheat prices.

The Planning and Development and Statistics Division told the committee that the prices of wheat flour were being monitored in 33 cities on a daily basis. As a result of various steps taken by the government, not only the prices of wheat and flour had stabilized, they had declined by 1.2 per cent during July 31 to Aug 21, 2004.

The meeting was informed that the prices would decline further on the arrival of wheat from abroad and as result of the State Bank's policy initiatives for wheat loan recovery.

The ECC was informed that the tendering process for the import of 500,000 tons of wheat had been completed. First two vessels carrying 50,000 tons and 45,000 tons of wheat from Australia and Russia would arrive on Sept 16.

Out of this wheat, Sindh would get 2.5 lakh tons, the NWFP 150,000 tons and Balochistan will get 100,000 tons wheat. Tenders for the second instalment i.e. 500,000 tons of wheat would be opened on Aug 30.

The State Bank governor informed the ECC that the SBP had set a deadline of Sept 30 for loan retrieval secured by the private sector for wheat trade. This would discourage hoarding, improve supply and reduce prices.

The meeting was informed that Pakistan achieved an industrial growth rate of 18.1 per cent during 2003-4, compared to 7.2 per cent in 2002-03. This included 50.3pc growth in automobile, 53.6pc in electrical, 20.9pc in pharmaceutical, 19.4pc in non-metallic mineral products, 2.2pc in basic metal industries, 7.2pc in light engineering goods, 31.7pc in leather products and 5.7pc in textile and apparel.

Various proposals regarding measures to overcome shortage of urea were also discussed. The meeting constituted a committee co-chaired by the minister for industries and Minfal to submit recommendations to the ECC to maintain an adequate supply of urea.

The meeting noted that although many fertiliser manufacturers had promised to increase their production, there was a likelihood of its shortage during December. The ECC also decided to conduct a survey to determine the level of supply and demand of urea and to ascertain its exact needs in the country.

The ECC also reviewed the issue of refund of money deposited by public for the Islamabad New City Project. In view of diverse opinions a committee comprising housing secretary, the Attorney-General of Pakistan and deputy chairman of the Planning Commission had been set up to review the case and submit recommendations to the ECC.

The issue of duty drawback on polyester products also came under discussion at the meeting. It was decided that to make Pakistan's exports competitive, particularly in view of the elimination of quotas in future, the duty drawback rates would continue to be calculated on the basis of deemed import of Pakistan State Fibre (PSF).

It was decided that for the calculation of duty drawback, prevailing international prices during the preceding six months would be taken into consideration. The Central Board of Revenue would shortly issue a notification in this regard.

The ECC discussed the issue of recovery of Foreign Relent Loan of Bolan Castings Limited. Keeping in view the public interest and commercial consideration, the meeting decided to waive the penal interest in line with earlier decisions of the ECC.

The committee also discussed the issue of recovery of Foreign Relent Loan of Dandot Cement Limited and decided to waive delayed payment charges/penal interest in line with earlier decisions of the ECC.

The meeting was informed that markup rate would not be reduced as it was against the contractual terms. The buyer would be required to provide a bank guarantee for the outstanding loan amount, as acceptable to the Economic Affairs Division.

A relief of Rs87.837 million would only be allowed provided the company satisfactorily made payment to the government of the rescheduled amount. In case of failure, the relief would not be available.