During the protest of the Ministry of Finance over ‘unsustainable fuel subsidy’, the Economic Coordination Committee (ECC) has approved Rs 55.48 billion for speedy reimbursement of price differential claims (PDCs) to the Oil Marketing Companies (OMCs) and oil refineries at economical rates of petroleum products than their costs for the first half of May.
The ECC meeting was held under the presidency of Federal Minister for Finance & Revenue Miftah Ismail. As per the official statement, the meeting also allowed the Trading Corporation of Pakistan (TCP) to search the probability of importing 200,000 tonnes of urea on a G2G basis and on deferred payment.
Besides Mr. Ismail, the meeting was joined by industries minister Makhdoom Syed Murtaza Mahmood.
Read more: Rs 20 billion proposed for paying price differential to Oil Marketing Companies
The Ministry of Industries and Production recommended the necessity to make strategic reserves of urea considering a thin margin between domestic demand and stock position, sources said.
The summary proposed that a better stock position helps to make sure the continuity of urea supply during the next fiscal year and asked to allow the import of urea from international markets to stabilize the local market.
Meanwhile, Mr. Ismail accused the PTI government of facilitating urea export to Afghanistan and beyond owing to highly subsidized production at home and substantially greater international rates.
The ECC also gave approval for a supplementary grant of Rs 55.48 billion for speedy disbursement to oil marketing companies (OMCs) and refineries for the first fortnight of May, as per the official, adding that because of the constantly increasing trend of oil prices in the international market, the quantum of subsidy has been on the higher side.
This was in spite of the fact that the Finance Division pretend to record that “maintaining fuel prices at a subsidized rate is consistently increasing fiscal and current account deficits and putting pressure on foreign exchange reserves.”
Moreover, it also emphasized that the situation was producing stress on the supply chain of petroleum products, which required “immediate reconsideration of the policy of price subsidy and also the resumption of recovery of petroleum development levy and sales tax.”
