The Economic Coordination Committee (ECC) of Cabinet on Friday allowed the Trading Corporation of Pakistan (TCP) to import 160,000 tonnes of urea from China and Azerbaijan under the government-to-government arrangement (G2G). The ECC meeting, chaired by Finance Minister Ishaq Dar, discussed the summary submitted by the Ministry of Industries and Production for the procurement of 200,000 tonnes of urea to replenish the strategic reserves.
The Ministry of Industries also informed about various options already negotiated regarding the import from Chinese firms who have committed to supply urea at the lowest rate. The TCP was given a go-ahead for importing 125,000 tonnes of urea from China and 35,000 tonnes from Socar of Azerbaijan on a G2G basis.
The ECC also directed the TCP to explore feasible options for the import of the remaining 40,000 tonnes. The ECC also considered a summary moved by the Ministry of Energy to bridge the diesel supply gap as the oil marketing companies were not importing high-speed diesel (HSD) in wake of high rates in the international markets.
The ECC recommended that PSO’s weighted average premium will be applied for HSD price computation as per the applicable policy. However, if the OMCs were to import HSD at a higher premium compared to the PSO, the differential will be computed in the price.
Meanwhile, a senior ministry official said that for any OMC importing HSD at a higher rate up to Dec 31, the differential will be reimbursed by the Oil and Gas Regulatory Authority (Ogra). The move is expected to encourage the OMCs to import diesel.
Earlier, the ECC on Nov 4, approved an upper limit of $15 per barrel as an import premium for HSD, but the product was not available in the Gulf market due to its increased demand in Europe, mainly triggered by the hindrances in Russian gas supply in the wake of the Ukrainian conflict. On the other hand, wheat sowing and flood rehabilitation efforts have pushed up the demand for diesel in Pakistan too.
Later, on Nov 14, to ensure smooth HSD supply the ECC enhanced the upper limit of premium on HSD to $16.75 per barrel for importing OMCs other than PSO for November, but the OMCs were facing difficulty in meeting imports at this upper cap too. The ECC also approved a technical supplementary grant of Rs115 million in favour of the Ministry of Housing and Works.