ISLAMABAD: Amid public outcry over naan and roti (flat bread) prices, the government on Wednesday reversed increase in gas tariff for tandoors. It also imposed 10 per cent regulatory duty (RD) on cotton imports to encourage better crop output in coming season.

These decisions were taken at a meeting of the Economic Coordination Committee (ECC) presided over by Prime Minister’s Adviser on Finance Dr Abdul Hafeez Shaikh.

The ECC “approved a proposal submitted by the Ministry of Energy to revise gas prices for roti tandoors with effect from July 1, 2019 in the larger interest of the general public,” said an official announcement.

Prime Minister Imran Khan had directed the relevant ministries on Tuesday to immediately reduce gas price for tandoors to address public unrest.

A senior government official said the cost of reduction in gas price would be met out of public money. The Ministry of Finance would provide Rs1.5 billion compensation to the gas companies as subsidy to recoup their revenue loss, he added.

He said gas tariff for tandoors would now be reduced to Rs700 per million British thermal unit (mmBtu) for consumption above 300 cubic meters instead of Rs1,283 per mmBtu on the basis of which the tandoor owners had increased roti and naan price by Rs3-5.

10pc duty imposed on cotton imports

Likewise, the rates for smaller tandoors were also approved for reduction to Rs110 per mmBtu for 50 cubic meters, Rs220 for 100 cubic meters and Rs300 for 200 cubic meters instead of existing Rs121 per mmBtu, Rs300 per mmBtu and Rs553 per mmBtu respectively.

The decision was taken despite the fact that price of wheat – which contributes 55-60 per cent to the price of roti – had remained unchanged while gas bills – which contribute 20-25pc to the price of roti – had also not been issued yet under the new tariff, having come into effect from July 1, 2019.

Under the decision, a detailed survey of tandoors across the country would be carried out in order to ensure that the benefit of revision in gas tariff was made applicable to stand-alone tandoors or roadside restaurants catering to the poor and no undue benefit was passed on to the tandoors in hotels or larger restaurants which were to be treated as commercial gas connections.

The ECC meeting also called for effective price control by provincial governments and relevant authorities to ensure the sale of roti at its old price and decided to review the decision after three months in case the tandoor owners failed to pass the benefit of reduced gas prices to the common man.

A report on wheat situation in the country was also presented to the ECC that put total stocks at 7.635 million tonnes available with Passco and provincial food departments.

It was also observed after the imposition of the ban on the export of wheat and wheat flour, there had been a considerable reduction in wheat prices in the market and the situation would eventually reduce the prices of roti and naan in the market.

RD on cotton imports

On the summary moved by the Ministry of National Food Security and Research, ECC decided to impose 10pc RD on the import of cotton. The meeting was informed that cotton production and area under cotton cultivation had been continuously declining over the years.

The production had declined from over 13m bales a couple of years ago to less than 10m bales last crop season while over 450 textile units required over 14.5m bales including 1.5m bales of extra long staple not produced in the country to meet domestic and export demands.

Because of low production last season, the government wants to encourage more cotton cultivation which would not be possible if farmers are not offered better terms by discouraging imports. Cotton sowing has already been affected due to unhampered imports over the past six months which is not a good omen.

The ECC also approved the implementation of “Authorised Economic Operator Programme” (AEO) as envisaged under section 212 A(1) of the Customs Act, 1969 was also approved by the ECC. The decision is a requirement of the World Customs Organisation for standardised movement of goods for international trade.

The ECC also allowed the two LNG re-gasification Terminals (Terminal 1, Engro Elengy Terminal Private Limited and Terminal 2 Pakistan Gas Port Consortium Limited) to allocate additional re-gasification capacity of terminal, if any, to third parties on a commercial basis under mutually agreed arrangements without affecting guaranteed supplies to the government.

Published in Dawn, August 1st, 2019