By Staff Reporter
ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet approved an additional grant of Rs27 billion for the state-owned Pakistan State Oil (PSO) to overcome losses in a Kuwaiti diesel credit facility, finance ministry said on Tuesday, citing exchange losses due to rupee-dollar parity over the last one year.
Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet,
The energy ministry submitted a summary on credit facility from Kuwait at the ECC meeting, chaired by minister for finance and revenue Ishaq Dar.
A post meeting statement said under the facility, PSO deposits an amount in rupee equivalent with the National Bank of Pakistan every 30 days from the bill of lading date of each shipment and transfers the cargo cost to the Kuwait Petroleum Corporation (KPC), the Kuwaiti national oil company.
“This account has witnessed huge exchange losses due to upheaval in the rupee-dollar parity during the last 12 months,” it added.
“The GoP (Government of Pakistan) is committed to cover these exchange losses. Considering the above situation, the ECC approved an immediate technical supplementary grant of Rs27 billion for the Kuwait petroleum company.”
Pakistan has been utilizing the KPC credit facility on the supply of diesel under a term contract with the PSO since 2000. The contract is renewed every year.
The cash-strapped country, which imports most of its energy needs, is currently looking to secure cheaper imports due to a severe foreign exchange crunch.
Russia said in January it would allow Islamabad to pay for energy imports in currencies of friendly countries. Pakistan is expected to start receiving cheaper Russian energy imports early next month.
The statement said the ECC also considered a summary of ministry of Kashmir affairs and Gilgit-Baltistan on Wheat supply to Gilgit-Baltistan and “approved immediate release of 25,000 tonnes for the months of March and April, 2023 to avoid shortage of wheat in the region, especially during the holy month of Ramzan”.
“Keeping in view current wheat prices, the ECC granted an additional amount of Rs2.9 billion through technical supplementary grant to meet urgent requirements of Gilgit- Baltistan.”
The ECC further directed the Ministry of KA&GB to submit a comprehensive plan for price rationalization in consultation with concerned stakeholders for consideration of the ECC within 30 days.
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