ISLAMABAD: The Economic Coordination Committee of the Cabinet on Thursday placed a ban on the import of CNG conversion kits and cylinders in view of the gas shortage in the country.
The installation of new CNG kits in vehicles was also banned, although owners of existing kits would be allowed to install them. Similarly, the CNG-fitted public transport vehicles — buses and vans — would be exempt from this ban.The ECC also withdrew tax and duty exemptions on export of petroleum products to Afghanistan and Central Asian countries and decided to float tenders again for the purchase of 200,000 tons of sugar for strategic stocks.
The ECC meeting presided over by Finance Minister Dr Abdul Hafeez Shaikh also decided to supply natural gas to fertiliser plants on the basis of their energy efficiency and asked the ministry of industries to prevail upon the fertiliser factories to reduce their prices in line with the subsidy being provided to them by the government.
According to a senior government official, the ECC was informed that certain elements in the oil supply chain were misusing the export rebate facility on export of oil products to Afghanistan by dumping products in the domestic market through fictitious export bills and smuggling, resulting in enormous revenue loss to the national exchequer.
Therefore, the ECC decided to withdraw export rebate and petroleum levy and general sales tax exemption on POL exports unless there was a government-to-government contract.
Likewise, the official said, refineries and oil marketing companies would be allowed to export their surplus JP-8 (jet fuel) against remittance of foreign exchange by the buyer in Afghanistan or Central Asian countries.
SUGAR PURCHASE:While discussing the sugar procurement from mills for strategic stocks, the finance minister appreciated efforts by a sub-committee that worked out a benchmark price of sugar at Rs53.73 per kg, including the replacement cost instead of Rs63 per kg offered by members of the Pakistan Sugar Mills Association.
The committee also allowed a one-time exemption from 3.5 per cent withholding tax on sugar procurement.
The meeting was informed that the middleman in the sugar supply chain was earning about Rs8 per kg, which was unacceptable. The committee decided to issue a gallop tender allowing all sugar mills to compete in the bidding instead of earlier tender that restricted procurement to PSMA members only.
The committee also decided to impose a 100 per cent penalty on sugar mills which failed to supply their committed quantities. It was informed that Kashmir Sugar Mills, which had offered a lower price than most bidders, was no more a defaulter because its management had paid Rs35 million to the Trading Corporation of Pakistan. It was informed that earlier the penalty was only 25 per cent and millers preferred selling their produce in the open market as the prices increased.
The ECC also decided to allow all bidders to supply 5000-10,000 tons each provided their prices were in line with the benchmark price worked out by the ECC's sub-committee and the prevailing wholesale market price. In case the required target of 200,000 tons of sugar procurement is not achieved, the TCP would be allowed to increase their quotas. Other blacklisted companies who had previously defaulted in supplying committed quantities would also be allowed in the interest of fair price competition provided they cleared their previous penalties.
UREA IMPORT:The ECC was informed by the ministry of industries that import requirements of urea stood at 700,000 tons to meet the overall demand of 3.4 million tons. Of this, import of 200,000 tons had already been allowed.
The petroleum minister informed the committee that import requirements of urea would further go up due to short supply of natural gas in the coming two months. The ECC discussed the proposal to import more urea quantities for the remaining period of Rabi 2011-12.
“The minister for finance enquired from members of the committee about formula on the basis of which the gas is provided to fertiliser plants and took exception that despite provision of gas to certain plants they do not lower prices of their products,” an official statement said.
The meeting was informed that only three plants — Engro 1, Fauji Jordan and Fatima Fertiliser — were getting smooth gas supplies at subsidised rates, but their prices were in the same range as that of other plants.
Dear visitor, the comments section is undergoing an overhaul and will return soon.