ECC directs Finance Ministry to improve PSO’s liquidity position

January 8, 2020: Adviser to the Prime Minister on Finance, Dr. Abdul Hafeez Shaikh chaired a meeting of the Economic Coordination Committee of the Cabinet at the Cabinet Division on Wednesday.

ECC approved the Technical Supplementary Grant of Rs. 1 billion under demand No.04-Cabinet Division for the establishment of the Pakistan Tourism Development Endowment Fund under a Public account. The Chair directed Pakistan Tourism Development Corporation to come up with their tourism development and soft image promotion plan in the next meeting.

ECC also granted approval of the allocation of Gas from PGNiG’s RIZQ Gas Field to M/S SSGCL. It was briefed to the ECC that currently, 2 wells namely Rizq-1 and Rizq -2 are producing 16 MMFCD gas from Rizq gas field, which is allocated to M/s SSGCL, whereas Rizq -3 which is under drilling, is expected to add another 9 to 10 MMCFD gas to the existing production. Upon completion of this well, the cumulative gas production from this gas field is expected to raise up to 25 MMCFD. The price of the gas shall be according to the applicable Petroleum Policy.

ECC also gave approval for the constitution of the Price Negotiation Committee (PNC) for the TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project. The PNC shall negotiate the price with Turkmen gas. The Committee shall consist of the following members; Secretary, Ministry of Energy (Petroleum Division) as chairman. Secretary Finance or his nominee, Joint Secretary, Ministry of Energy (Power Division), Director General (Gas)/ Director (Gas) and Managing Director, SSGCL as members.

On the Demand moved by the Ministry of Industries and Production for Rs 3.02 billion for the payment of outstanding dues of SSGC Private Limited by Pakistan Steel Mills on account of gas bills, the ECC directed to constitute a three-member committee under the Chairmanship of Secretary Finance to find out a feasible solution for the issue so that the already allocated budget may not be exceeded and the liabilities of both SSGC and PSM are duly settled.

ECC directed the Ministry of Finance to explore the possibilities for improving the liquidity position of Pakistan State Oil as exchange losses of around Rs 28 billion have incurred on FE-25 loans by PSO. The loans were acquired under the instructions of the Ministry of Finance for the financing of import operations of PSO. Finance Ministry assured the ECC of the utilization of possible all funding options in the ongoing financial year and any deficiency in the funds shall be entertained in the upcoming budget.

ECC granted an extension of the Government of Pakistan guarantee against credit facility of National Bank of Pakistan amounting to PKR 5 billion in favor of Utility Stores Corporation of Pakistan.

On the request of the Ministry of Water, Resources ECC granted approval to WAPDA to raise loans for the settlement of the Financial Facility amounting to PKR to PKR 17.500 billion with a one-year tenure and GOP guarantee. Clearance under Prudential Regulations R-4(clause 1a and 2) from the State Bank of Pakistan to disburse the facility initially against a letter of comfort was also granted.

Press Release

Posted on: 2020-01-08T17:34:00+05:00

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