The Economic coordination committee (ECC) should allow an interim increase in the margins of petroleum marketing companies (OMC) of 6.5% on the sale of petroleum products.

Previously, the ECC considered a proposal to increase OMC margins. However, he had formed a committee to historically analyze and review the margins before making a decision.

The economic decision-making body was informed that no study had been carried out by Pakistan Institute of Development Economics (PIDE) because the Oil and Gas Regulatory Authority (Ogra) and Planning Commission were not prepared to shoulder the expenses.

In a recent report, the Petroleum Division informed the ECC that the committee had proposed an increase in the margins of WTO and petroleum product traders on a provisional basis, as the study had not been carried out so far.

The ECC had approved the latest revision of WTO and concessionaire margins on November 6, 2019 which came into effect on December 1, 2019.

The Committee recommended that the government provide interim relief to WTOs and concessionaires until the PIDE study is completed. The study is expected to be completed by June 2021.

The committee deliberated and proposed to revise the margins of OMCs and dealers up by 6.8% in accordance with the average underlying inflation available (NFNE-Urban) of the CPI (Base 2015-16) as published. by the Pakistan Bureau of Statistics (PBS) for the period October 2019 to September 2020 (12 months).

The committee recommended an increase in gasoline and diesel margins of Rs 0.19 per liter, from the existing Rs 2.81 to Rs 3 per liter each for OMCs. He also proposed an increase of Rs 0.25 per liter on gasoline and Rs 0.21 per liter on diesel for dealers to Rs 3.95 and Rs 3.33 per liter, respectively. The current margin on gasoline is Rs 3.70 and high speed diesel Rs 3.12 per liter. These margins were proposed on a provisional basis until the completion of the study by PIDE.

Allegations against PSM

Pakistan National Shipping Corporation (PNSC) vessel; The MV Hyderabad was arrested in South Africa on August 11, 2016 and another vessel “MV Chitral” was arrested in Durban, South Africa on July 29, 2017 because Pakistani Steel Mills (PSM) had not filled. the coal transport contract. , which was signed between PSM and Coniston of Africa.

As a result, the South African government detained the two PNSC vessels on the grounds that both PNSC and PSM were entities of the Government of Pakistan. As a result, PNSC had to pay Rs 149 million on ECC management for warranty and legal fees, which were to be reimbursed to PNSC.

The ECC in February 2020 ordered the Finance Division to allocate 149 million rupees for reimbursement to the PNSC. In response, the Finance Division indicated that the Ministry of Maritime Affairs was submitting a proposal for allocation of Rs 149 million in the next fiscal year i.e. 2020-2021, in accordance with its request and agreed. to pay the same.

In accordance with the decision of the ECC to pay 149 million rupees to the PNSC, the amount was allocated by the finance division in the 2020-2021 budget. As a result, the Ministry of Maritime Affairs kept the amount in its own budget for reimbursement to the PNSC in accordance with the decision of the ECC.

But while handling the case, it was noticed that the finance division had imposed a financial cut, due to which only Rs 139.315 million was released out of an allocated amount of Rs 149 million as mentioned by the division. finances.

Now the Ministry of Maritime Affairs has demanded payment of the remaining amount of Rs9.685 million. The ECC has been asked to allocate an additional grant to release the remaining amount to the PNSC.

Additional grant for
social housing

The Ministry of Housing and Public Works has asked the ECC to allocate funds amounting to 1.5 billion rupees through an additional subsidy for low cost housing units under the low cost housing program. Prime Minister’s Award.

The Finance Division was to provide funds in the amount of Rs5 billion during the 2019-2020 fiscal year for the program through its authorized representative “Ministry of Housing and Works (Authority)” who signed a agreement with “Akhuwat Islamic Microfinance (AIM)” to lend this amount to deserving families in Pakistan for housing.

It was agreed that the Pakistani government would provide 5 billion rupees to AIM through the authority, but due to Covid 2019 only 3 billion rupees could be paid to borrowers and the remaining amount of 2 billion of rupees was returned during the 2019-2020 financial year.

The Ministry of Housing and Public Works has requested the Finance Division to provide a repaid amount of Rs 2 billion under the “Prime Minister’s Low Cost Housing Program” for the period 2020-2021. The finance division only allocated 500 million rupees instead of the 2 billion rupees of the transferred funds, which were turned over to AIM.

They were again requested to kindly allocate the remaining funds amounting to Rs1.5 billion so that these can be disbursed to AIM in accordance with the disbursement agreement of the interest-free loan to borrowers under of the Prime Minister’s program.

The Finance Division has expressed its agreement to make the necessary provisions available for the Supplementary Technical Grant (STG) to the Ministry of Housing and Works. In this regard, the approval of the ECC has been requested by the Federal Cabinet.

Posted in The Express Tribune, March 9^e, 2021.

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