ISLAMABAD: Undecided about revising gas prices, the Economic Coordination Committee (ECC) on Tuesday directed the petroleum ministry to continue gas supply to all fertiliser plants for the time being to ensure sufficient supply to farmers in the just-started Rabi season.
However, the meeting, presided over by Caretaker Finance Minister Dr Shamshad Akhtar, approved two summaries — one green-lighting the country’s first-ever telecom infrastructure-sharing framework, and the other allowing a change of the name of Al-Tuwairqi Steel Mills Ltd (TSML) to National Steel Complex Ltd (NSCL) because of a change of ownership. The change of name is subject to clearance from the Ministry of Law.
The ECC took up summaries of the Ministry of Energy’s petroleum division and the Ministry of Industries regarding the pricing and allocation of gas for fertiliser plants.
The committee “directed the Ministry of Energy to continue supplying gas to all fertiliser plants to ensure sufficient supply of fertilisers in the market”, an official statement said.
Approves first-ever telecom infrastructure-sharing framework
It said the ECC also decided to form an inter-ministerial committee with the representation of the ministries of finance, planning, commerce, food security, industries, power and energy to present recommendations on allocating and pricing gas for the fertiliser industry.
Informed sources said the petroleum division was seeking an increase in the sale price for Mari gas-based fertiliser plants to bring them on a par with other fertiliser plants with effect from Oct 1.
This required the gas rate for feedstock at Rs580 per million British thermal units (mmBtu) and Rs1,580 per mmBtu for fuel compared to the existing rates of Rs302 and Rs1,080 to generate about Rs20bn in additional revenue for Mari — a joint venture of government holdings and the Fauji Foundation.
The idea was to bring the average gas rates for Mari-based fertiliser plants on a par with industrial rates of about Rs1,260 per unit. The committee noted that the existing notified prices were insufficient to meet Mari Petroleum’s revenue requirements.
The Ministry of Industries, however, reported that such a move would increase urea prices by about Rs800 per 50kg bag to reach Rs4,600. Imported urea is priced at an estimated Rs7,700 per bag.
Some stakeholders were of the view that fertiliser units were not transferring the benefit of about Rs90bn worth of subsidised gas to farmers, who should be directly provided the subsidy.
It was noted in the meeting that in March, the ECC, led by former finance minister Ishaq Dar, formed an inter-ministerial committee for detailed recommendations on gas allocations and pricing for the fertiliser industry.
That committee gave its recommendations in the last ECC meeting — also held under the previous government on Aug 8 — but was told to submit a revised summary based on comments from all stakeholders.
Tuesday’s ECC meeting also reviewed the performance and trends of key economic indicators, including the Consumer Price Index (CPI), presented by the Ministry of Planning and decided to form a core group comprising the secretaries of planning, commerce, food security and industry to present concrete proposals for monitoring and advising the ECC on prices of the essential commodities as well as maintaining the stocks of strategic products.
Moreover, on a summary submitted by the IT ministry, the ECC discussed and approved the first-ever telecom infrastructure-sharing framework. The framework aims to allow telecom operators and internet providers to outsource infrastructure to minimise costs and improve services.
The ECC also approved another summary for the release of IMT spectrum to improve the next-generation mobile broadband services in Pakistan. The ECC also approved the formation of an advisory committee for releasing the unsold spectrum along with its terms of reference.
Published in Dawn, October 4th, 2023