Ishaq Dar chairs Economic Coordination Committee meeting of the Cabinet

Islamabad, October 29, 2014 (PPI-OT): Federal Minister for Finance Senator Muhammad Ishaq Dar chaired the meeting of the Economic Coordination Committee of the Cabinet today at the Prime Minister’s Office. ECC also considered the proposal submitted by the Ministry of Petroleum and Natural Resources for exempting LNG import from GIDC and GST. The chair after deliberations accorded exemption from GIDC as it was not applicable on imports as recommended by the committee under the convener ship of secretary Finance with secretary P and NR and chairman FBR as members.

It was however decided that 5% GST on LNG import would be levied in any case. The Finance Minister said that “the decision is taken with a view to facilitate the general public and encourage investment in the sector. We cannot allow total exemption from general sales tax because we want to promote tax culture in Pakistan. If the business is thriving, there is no harm in contributing a small percentage to the exchequer”.

ECC considered and approved a proposal moved by the Cabinet Division for amendment in the OGRA Ordinance 2002 to monitor / establish prices of all refined oil products in the country after the Law, Justice and Human Rights Division’s comment that the proposed draft bill was in order and recommended to place it before the CCI. A Committee under the chairmanship of Minister for Science and Technology, Zahid Hamid had examined the issue holistically before the proposal was submitted seeking final approval from ECC.

The amendments are made in the rules guiding (a) Oil sector regulations which include; monitoring the prices of petroleum products in the market, definition of petroleum products, including CNG.

Also the power and function of Authority as well as role of the Federal Government in determining the well-head gas prices, including imported gases in the pricing of natural gas, and power to determine prices without public hearing under certain conditions are specified. It also deals with imposition of fines and penalties, and determining and notifying the maximum sale prices of CNG to be charged by a licensee from a consumer for vehicular use. (b) Strengthening the administrative functions of OGRA.

On the proposal moved by Finance Division to give permission to Packages Limited for equity investment abroad through a special purpose vehicle in Mauritius with initial remittance of USD 100,000, the ECC accorded approval with the clear instruction that the equity/investment would not exceed USD 15million.

ECC also gave consent to the proposal by Ministry of Industries and Production for directing Trading Corporation of Pakistan to ensure procurement of 0.185 Million Tons of Urea Fertilizer under SABIC facility by December 15th 2014 for the upcoming Rabi crop. The balance quantity of 0.385 million tons may be imported as soon as possible from open international market. The foreign exchange required for the import of the stock will be approximately around $123.92 million and would involve Rs. 4.19 billion of subsidy.

ECC disposed of a proposal moved by Ministry of petroleum and Natural Resources regarding Gas Pipeline Infrastructure Development Plan in the wake of LNG imports and anticipated indigenous supplies asking OGRA and Ministry of Petroleum and Natural Resources to mutually take a decision on going ahead with the development plan within a week.

On a proposal from the Ministry of Ports and Shipping, ECC allowed Port Qasim Authority (PQA) to buy or lease four LNG compatible Tug Boats from its own resources while also according permission for their commercial usage on cost recovery basis with the direction that these boats should also be used for other purposes.

The chair also directed that the boats should be made available before 7th of January 2015 as LNG shipments would be due by that point in time. The charges for boat services would be mutually decided by PQA, Ministry of Port and Shipping and the Ministry of P and NR, the ECC further directed. ECC shall meet again tomorrow for considering some other important agenda items.

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