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ISLAMABAD, April 14: The Economic Coordination Committee of the cabinet on Friday decided to set up a $2-billion mega oil refinery at Khalifa Point in district Hub, Balochistan.
The ECC meeting was presided over by Prime Minister Shakuat Aziz.
The refinery, to be commissioned by 2010, would have a maximum refining capacity of 13 million tons of petroleum products — higher than the country’s total existing capacity of 12.8 million tons.
The ECC directed the ministry of petroleum and natural resources to award the contract through an international competitive bidding on build, own and operate (BOO) basis.
At present the country consumes 16 million tons of petroleum products, of which 82 per cent requirement is met through imports. Total refining capacity in Pakistan currently stands at 12.8 million tons.
TRUCKING INDUSTRY: The ECC approved, in principle, a proposal to rationalise import tariff for the trucking industry in order to overcome shortage of trucks. This would be announced in the next year’s budget.
AUTO INDUSTRY: The ECC also considered a policy of incentives for new entrants in the auto industry and constituted a committee to review this policy in details. The committee, led by the prime minister and comprising deputy chairman of the Planning Commission, commerce minister, secretary of the industries ministry, minister of state for investment and chairman of the Central Board of Revenue, would take a decision within a week.
EXTENSION OF LEASE PERIOD: The ECC allowed an extension of the lease period of mining, production and development of three major fields of Pakistan Petroleum Limited for their full life to get better price during the sale of 51 per cent of its shares.
IMPORT OF POWER: The ECC also approved about 67 per cent increase in power tariff for the import of 30mw of electricity from Iran for border areas of Taftan and Mashakhail. Wapda has been importing this electricity at three cents per unit under a three-year contract which has now been increased to five cents per unit.
INDUSTRY STATUS: The ECC rejected a proposal of the petroleum ministry for giving the CNG sector an industry status on the ground that the petroleum sector was already under a deregulated regime.
The ECC, however, approved a policy for the import of liquefied natural gas (LNG) which would be announced separately. Interestingly, the government has already issued a no-objection certificate to the Associated Group to begin LNG imports.
The ECC also reviewed the price situation, tax collection and import and exports during the first nine months of the current fiscal year and expressed the hope that the annual inflation target of eight per cent would be achieved.
It also decided to establish multiple vegetable markets in all major cities to break monopoly of the existing markets.
