The Economic Coordination Committee of the cabinet on Thursday allowed about 13 paisa per litre increase in port charges for oil products at Fauji Oil Terminal Company (Fotco) and approved an import tender for procurement of 120,000 tonnes of wheat, having a landed cost of about Rs2,470 per 40kg.
A meeting of ECC, presided over by Minister for Finance and Revenue Shaukat Tarin, exempted import of auto disposable syringes and raw material for their local manufacturing from taxes and duties.
The committee also extended exemption to 19 subsidiary entities — ships — of national flag carrier — from six years to seven years from compliance with corporate rules.
On the recommendation of the Ministry of National Food Security and Research, the ECC approved a tender for procurement of 120,000 tonnes of wheat in compliance with the directive of the cabinet to procure four million tonnes of wheat to build strategic reserves during the current financial year.
Sources in the food security ministry said the tender attracted about $369.69 per tonne of wheat which worked out at about Rs61,740 at an exchange rate of Rs167 per dollar. This translated into about Rs62 per kg or about Rs2,470 per 40kg. With incidentals, the average per kg price would work out close to Rs67-68 per kg against existing market price of about Rs61-62 per kg.
The ECC urged the chairman of the Trading Corporation of Pakistan (TCP) to expedite efforts for importing wheat to stabilise local prices and to ensure smooth supply of wheat across the country. It also directed the TCP chief to present a report to Prime Minister’s Adviser on Commerce Abdul Razak Dawood with a complete timeline of wheat import and other requisite details at the earliest.
The ministry of maritime affairs had moved a summary saying Fotco charges for high speed diesel (HSD) be fixed at $1 per tonne in equivalent local currency to be implemented and incorporated in its pricing formula with retrospective effect from July 2012 and Rs1.51bn arrears be recovered from OMC/dealer margin.
Likewise, the same handling tariff should be applicable on petrol through existing pipeline till such time a dedicated pipeline is laid down by Fotco. The committee was informed that the proposed tariff calculated on the basis of 7 per cent inflation rate would have the “additional impact per litre of about 13 paisa ($0.0008).
It was argued that revision in Fotco tariff was required to meet operating and maintenance expenses which were approved in the year 2000 for a period of the 20 years, but not revised. “After due deliberation, the Committee approved the revision in tariff for Fotco, locked for 5 years, to be paid in equivalent Pak rupees,” said an announcement.
However, on the question of backdated recoveries with effect from July 2012, the ECC constituted a sub-committee led by the deputy chairman of the planning commission and comprising representatives of Petroleum, Maritime Affairs and Finance Divisions, Ogra, Pakistan State Oil and A.F Ferguson to decide about tariff differential accumulated between 2012 to 2020.
The ministry of maritime affairs tabled another summary regarding relaxation to 19 subsidiary companies of the Pakistan National Shipping Corporation (PNSC) under Public Sector Companies (Corporate Governance) rules. The meeting was told that these entities were created in 2001 to limit the liability of each vessel, especially in case of arrest of a vessel by any port, like for marine pollution or third-party claims. The objective was that in some cases, the liabilities could go beyond the value of vessel, resulting in arrest of more vessels registered in the name of same entity – PNSC.
The corporate rules, however, required all these separately registered entities of diverse nature to provide quarterly audited reports. The matter was taken up in 2013 under revised corporate rules and the Securities and Exchange Commission of Pakistan (SECP) granted a two-time exemption for a period of three years each that ended on June 30, 2019, and needed further extension as SECP’s powers for further extension no more existed.
The ECC approved relaxation in rules till June 2021 with a direction to explore the option of formulating independent boards for the subsidiaries to be headed by CEO as per the principles of corporate governance.
The committee approved summary presented by the Ministry of National Health Services regarding exemption from taxes and duties on import of auto disable syringes and raw materials-products for local manufacturing of auto disable syringes enabling transformation from conventional to auto disable syringes.
The ECC approved a summary presented by the Federal Board of Revenue chairman to strengthen Inland Revenue Enforcement Network (IREN) to combat tax evasion and leakages of duties payable on specified goods through enforcement of Track & Trace system. The IREN will also check the goods supplied out of erstwhile FATA/PATA areas for ascertaining validity and conformity.
