September 10, 2018 (MLN): Economic Coordination Committee (ECC) meeting chaired by Finance Minister Asad Umer is currently in progress where a final decision will be taken on the two of the most important issues on agenda, namely gas price hike and subsidy on the import and local production of fertilizers.

These subjects have been a topic of discussion during all of ECC’s previous meetings since the committee was reconstituted in August. It was previously decided that the fertilizer industry is to return to the economy the Rs 14 billion windfalls earned through subsidized exports during the last crop season.

According to sources, it is crucial to make a quick decision regarding fertilizer import since Rabi season is just around the corner and cropping season begins on October 1st. A shortage of fertilizer could lead to higher prices or worst, black-marketing, according to official sources.

As per official reports, Mr. Asad Umer and Abdul Razzaq Dawood, the prime minister’s advisor on commerce, industries and production, have taken a deeper look at the industry during the last few days.

According to sources, if run on full capacity, three major fertilizer units – Pak-Arab, Agritech and Dawood Hercules – can collectively produce 87,000 tons per month, leaving a shortage of between 60,000 to 100,000 tons for imports.

The ECC is expected to decide on the requirement of subsidy by the fertilizer industry to run its domestic plant and on the import of the remaining quantity of fertilizer, while trying to minimize the import process as much as possible.

The second important agenda for the ECC meeting today is how to implement an average of 46% gas price increase approved by the Prime Minister recently on recommendations of the Oil and Gas Regulatory Authority (OGRA).

According to Geo News, gas companies have demanded a hundred percent increase in tariffs.

According to the summary moved by the petroleum division on gas prices on the basis of OGRA’s recommendations, price increases have been proposed at different rates for different slabs of domestic consumers, in addition to tariff increases for power plants, and cement plants. According to the petroleum division, a 30 percent increase in gas sale rates had been worked out by the regulator for all consumers except domestic, for which an increase of 186 percent had been worked out.

It was informed to ECC last week that the country’s circular debt stood at Rs 596 billion, following an increase of Rs.30 billion in July. Moreover, another Rs.582 billion debt with Power Holding Company had brought the total current liability to Rs.1, 188 billion, according to the Ministry of Energy, Power Division’s presentation to ECC last Wednesday.

The finance minister has assured that all the facts discussed during the meeting will be disclosed to the general public in order to ensure a transparent decision making process.

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