ISLAMABAD: The Economic Coordination Committee (ECC) has allowed to apply PSO’s weighted average premium (KPC & Spot) for HSD price computation as per Federal Govt applicable policy guidance.
Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over the meeting of the Economic Coordination Committee (ECC), today.
Sources said that the Ministry of petroleum submitted the summary on High Speed Diesel (HSD)/Gas Oil premium.
It was told that ECC on November 4, 2022 had allowed a premium on HSD imports subject to maximum capping at $15/BBI for importing OMC during the months of November and December 2022.
However, the oil industry expressed serious concerns regarding procurement of HSD as the product molecule is either not available in the gulf market or higher premiums are being charged in view of country specific risk factors in relation to supplies to Pakistan.
Consequently, the matter was again placed before the ECC for allowing premium on HSD import without capping at any upper limit and subsequently, ECC on November 14, 2022 approved premium on HSD import for the month of November 2022 only subject to maximum capping at $16.75/bbl.
Meanwhile, PSO spot tender opened on November 16 for HSD delivery during November 26 to December 5, 2022 has turned out to be non-responsive as no valid bid was received. this points towards the apprehension that currently the product is short in the international/gulf market and procurement thereof will most likely be at higher premium. any further delay in decision making on premium issues will make procurement more difficult, discouraging the OMCs to import accordingly, there are strong changes of HSD shortages in the country.
Petroleum division asked ECC to apply PSO’s weighted average premium (KPC & Spot) for HSD price computation as per Federal Govt applicable policy guidance and in case of higher HSD premium paid by importing OMCs other than PSO, the differential of premium may be conveyed by OGRA with relevant documents for consideration and approval of ECC of the cabinet before its adjustment through IFEM.
According to Finance ministry Press release, the ECC recommended that PSO’s weighted average premium (KPC & Spot) may be applied for HSD price computation as per Federal Govt applicable policy guidance and in case of higher HSD premium paid by importing OMCs other than PSO, the differential of premium will be computed in the price.
The Ministry of Industries and Production submitted a summary on procurement of 200KMT Urea and shared that the Ministry has negotiated on various options including import from Chinese firms who have committed to supply the negotiated quantity of Urea fertilizer at the lowest rate. The ECC after discussion allowed TCP to proceed ahead for import of 125,000 MT on G2G basis from China for meeting demand of Urea fertilizer and import of 35000 MT on G2G basis through M/s Socar from Azerbaijan. The ECC further directed TCP to explore feasible options for importing the remaining quantity of Urea fertilizer to meet the strategic reserves of 200,000 MT.
The ECC also approved a technical supplementary grant of Rs. 115 million in favour of the Ministry of Housing and Works.