ECC okays 48% urea price differential


The federal government on Friday licensed the import of 160,000 metric tonnes of urea at two various charges of $480 and $710 in line with metric tonnes beneath government-to-government (G2G) offers after a non-public bidder defaulted on its legal responsibility.

It additionally succumbed to the calls for of oil advertising corporations (OMCs) and withdrew its previous determination to cap the top rate on high-speed diesel (HSD) at $16.75 in line with barrel, which is able to put an extra burden of billions of rupees on customers.

The Financial Coordination Committee (ECC) of the Cupboard, on Friday, needed to take the tricky determination of uploading urea with a 48% value differential in two other offers in a bid to satisfy the enter wishes of the agriculture sector. The whole import price of the urea is $84.9 million or Rs19 billion.

On October twenty eighth, the ECC had given the contract for the import of 300,000 metric tonnes of urea to M/s Makhdoom Logistic Services and products on the price of $520 in line with tonne. The ECC used to be knowledgeable, alternatively, that the birthday party had defaulted on its provides.

The Ministry of Industries submitted a abstract at the procurement of 200,000 metric tonnes of urea. In step with the Finance Ministry, the industries’ ministry additionally shared that it negotiated other choices, together with the choice of uploading from Chinese language corporations that dedicated to supplying the negotiated amount of urea fertiliser on the lowest price.

After discussions, the ECC allowed the Buying and selling Company of Pakistan Restricted (TCP) to continue with uploading 125,000 metric tonnes, on a G2G foundation, from China to satisfy the call for for urea fertiliser, mentioned the Finance Ministry.

The ECC additionally allowed the import of any other 35,000 metric tonnes on G2G foundation by means of M/s Socar from Azerbaijan. It additional directed the TCP to discover possible choices to import the rest amount of urea to satisfy strategic reserves of 200,000 metric tonnes.

China will give you the 125,000 metric tonnes of urea thru M/s Sinochem and M/s CNOOC at $480 in line with tonne. The secretary industries had controlled to persuade the Chinese language corporations to scale back their value via $90 in line with tonne, saving the nationwide exchequer about Rs2.5 billion. The rustic can be given the supply of paying for the import 3 months after supply.

The federal government, alternatively, needed to swallow the sour tablet of accepting the Azerbaijan deal at $710 in line with tonne for 35,000 metric tonnes, which used to be 48% dearer than the deal struck with the Chinese language corporations. The ECC used to be knowledgeable, alternatively, that Azerbaijan would give you the urea inside 5 days.

Final month, the ECC allowed the import of 300,000 tonnes of urea at the cost of $156 million. The TCP have been accepted to signal a freelance for the bottom bid of $520 in line with tonne to import 300,000 tonnes of urea. The Ministry of Nationwide Meals Safety and Analysis had beneficial the deal.

There’s a direct wish to import urea to make certain that there is not any scarcity of the crucial enter particularly for wheat sowing.

The ECC additionally regarded as a abstract submitted via the Ministry of Power on high-speed diesel (HSD)/fuel oil top rate.

In step with the verdict, “Bearing in mind the expanding call for for HSD within the nation, the ECC beneficial that Pakistan State Oil’s (PSOs) weighted moderate top rate (KPC and Spot) could also be carried out for HSD value computation as in line with the government’s acceptable coverage steering. And in case of upper HSD top rate paid via uploading OMCs rather then PSO, the differential of top rate might be computed in the fee.”

Through distinctive feature of the recent determination, the ECC has withdrawn its earlier determination to cap the OMCs margin first at $15 after which at $16.75. It’s now anticipated that the OMCs gets a minimal $22 in line with barrel margin.

The ECC additionally licensed a technical supplementary grant of Rs115 million in favour of the Ministry of Housing and Works for the development of the Gujrat-Lalamusa Street – a scheme beneficial via a political candidate.

Revealed in The Categorical Tribune, November 19th2022.

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