Pakistan approves plan to import 300,000-tonne wheat from Russia

• Pakistan to buy wheat at cost of $372 per tonne.
• ECC approves jacking up revised margins of OMCs.
• Sources say petroleum prices may be deregulated with effect from November 1.

ISLAMABAD: The Pakistan government on Monday approved the plan to buy 300,000 tonnes of wheat from Russia at a cost of $372 per tonne, The News reported. 

The Economic Coordination Committee, headed by Finance Minister Ishaq Dar, approved the import of wheat on the government-to-government deal. 

The committee also approved jacking up revised margins of oil marketing companies (OMC) from Rs3.68 on MS petrol and diesel to Rs6 per litre, witnessing a surge in the margin of OMCs by 63.04% for an interim period.

Top official sources said that after detailed deliberations, it was decided that the petroleum prices may be deregulated with effect from November 1, 2022. In the meantime, the Oil & Gas Regulatory Authority (OGRA) will conduct an analysis of the implementation of the deregulation of petroleum prices in consultation with the stakeholders with reference to in-country freight equalisation, protection of dealer margins and collection of sales tax on dealer margins. 

For the interim period, the OGRA would recommend its proposal to the committee not later than September 15, 2022. For an interim period, the OMCs agreed that their margins may be fixed at Rs6 per litre. The ECC also approve that OGRA will monitor the margins to be accounted for in the ex-depot sales price as approved by the forum.

Earlier, it was also proposed that with effect from August 5, 2022, OGRA may determine prices of petroleum products every Friday evening with the already approved mechanism on weekly basis and prices may be made effective from every Saturday. However, this decision could not be implemented so far.

According to an official announcement made by the Ministry of Finance on Monday night, Dar presided over the meeting of the committee at the Finance Division. Planning Minister Ahsan Iqbal, Commerce Minister Syed Naveed Qamar, former premier Shahid Khaqan Abbasi, SAPM on Finance Tariq Bajwa, Special Assistant to Prime Minister on Revenue Tariq Pasha, federal secretaries, Federal Board of Revenue (FBR) chairman and other senior officers attended the meeting.

Ministry of Commerce presented a summary on the procurement of wheat from Russia on a G2G basis and submitted the offer of Prodintorg — a state-owned enterprise of the Russian Federation for the supply of 300,000 tonnes of specified milling wheat at $372 per tonne for the shipment period from November 1, 2022, to January 15, 2023. The ECC after deliberation approved the summary.

The Ministry of Energy (Power Division) presented a summary of the revision of OMCs margins on petroleum products. After comprehensive discussion, ECC approved the summary in principle and allowed the agreed revised margin at Rs6/litre but its implementation will be subject to fiscal space in POL prices.

The Ministry of Energy (Petroleum Division) presented another summary for amendment in the Power Purchase Agreement (PPA) for the commissioning of the designated project – CPEC – TCB – I (On Thar Coal) without financial close. The summary presented that the project is 90% complete but the company was unable to achieve the financial close due to unforeseen events and reasons which led to delays in Sinosure and lenders’ approvals. 

Therefore, the request was made to consider and permit the effectiveness of the PPA from the date of its execution i.e. 27-08-2019 and authorise CPPA to amend the PPA accordingly. The ECC after deliberation approved the summary and added that it must be ensured that there will be no impact on tariff through this decision and this summary is being approved due to an exceptional situation.

The Power Division presented another summary of the Pakistan Energy Revolving Fund. The ECC after deliberation approved the opening of an assignment account under the title of Pakistan Energy Revolving Fund to be opened with the State Bank of Pakistan (SBP) Islamabad and operated by CPPA.