Import of wheat at $ 286 per metric ton authorized price

ISLAMABAD:

The government on Wednesday authorized import from 300,000 metric tonnes of wheat to $ 286 per metric tonne, but again postponed the decision to increase electricity prices by Rs3.50 per unit.

Led by Finance Minister Dr Abdul Hafeez Shaikh, the cabinet’s Economic Coordination Committee (ECC) postponed the price increase due to the fuel cost adjustment for the months of November 2019 to June 2020.

The ECC authorized the Trading Corporation of Pakistan to accept offers to import 300,000 tonnes of wheat at $ 286 per metric tonne.

The government has so far allowed the import of more than 2.6 million tonnes of wheat to fill the deficit, but prices have not been brought under control.

The government plans to import around two million tonnes of additional wheat due to below target production this year.

The government has postponed the decision to increase the electricity tariff by 3.50 rupees per unit to recover the cost of the pending fuel. The Food Division proposed to pass the increase on to the electricity bills for March and April.

The Ministry of Energy (Electricity Division) presented a summary regarding a decision by the Authority for the Adjustment of the Fuel Charge (FCA) and after extensive discussion, the ECC asked the secretaries from the finance and power divisions to deliberate further and present an updated proposal before the next ECC, according to the finance ministry document.

The proposed average increase of 3.50 rupees per unit was more than 1.95 rupees per unit increase in electricity bills due to the annual base tariff.

Currently, the government is in the process of implementing IMF conditions for the relaunch of the bailout program.

The Power division informed the ECC that Nepra had notified the FCA from November 2019 to June 2020 for transmission to consumers in two months (August and September 2020).

The FCA rate for the August-2020 billing month had been notified at Rs2.4228 / kWh (for domestic consumers using up to 300 units per month and private agriculture) and Rs1.1711 / kWh (other categories of consumers).

But the government remains unable to make a final decision on the issue.

The ECC also changed the criteria for granting subsidies on housing loans to 300,000 families under the Prime Minister’s housing program.

The ECC authorized the Naya Pakistan Housing and Development Authority (NAPHDA) to enter into agreements with private parties for the implementation of the program.

The ECC approved the stipulated eligibility criteria and payment mechanism for the subsidy of costs per 100,000 housing units to be built in phase I by the end of the year, according to the finance ministry.

The private party will submit a project to NAPHDA who will approve it provided that the land has a clear title and must have road connectivity and access to other services.

“NAPHDA needs to obtain information on the willingness of NADRA and the National Counterterrorism Authority to occupy low cost housing in the proposed location. “

After signing the agreement and obtaining financing from the bank, the ballot will take place to provide soft loans to candidates.

In the event of default, the amount of the grant will be treated as equity participation in the mortgage and will be liable to be taken over by the federal government. Banks will have the right to recover their loans under foreclosure law and regulations.

Likewise, the ECC also approved a summary from NAPHDA on a review of the key parameters of the marginal subsidy program for housing finance, as recommended by the State Bank of Pakistan, to ensure a maximum participation for access to affordable, quality housing by fulfilling relatively flexible eligibility criteria.

In July of last year, Prime Minister Imran Khan announced a subsidy of 300,000 rupees per dwelling for 100,000 units and 30 billion rupees had been allocated in the budget.

The Energy Division has submitted another proposal regarding the payment of unpaid dues and the settlement of tariff issues with the government of Azad Jammu & Kashmir.

After a detailed assessment, a sub-committee was formed under the chairmanship of the prime minister’s adviser on institutional reforms, Dr Ishrat Husain, the finance ministry said.

The federal government provides electricity to AJK consumers at a cost of Rs 18.8 per unit to Rs 24.5 per unit. But the AJK government foots the bill at the rate of Rs 2.59 per unit, which translates into an annual subsidy of Rs 38 billion. The Ministry of Finance does not fully fund the grant, which adds to the circular debt.

The finance ministry has backed a proposal to end electricity subsidies to AJK consumers and wants to provide electricity at standard tariffs.

The ECC approved a summary from the Department of Energy (Energy Division) regarding the GOP sovereign guarantee against a 15.3 billion rupee financing facility from local banks for the evacuation of electricity from the 1,320 MW Thar coal-based project (SSRL / SECL).

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