ECC approves technical grant for Kuwait Petroleum Company to avert PSO default

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet approved a technical supplementary grant of Rs27 billion for Kuwait Petroleum Company.

An emergent meeting of ECC approved a special grant of Rs27 billion (about $100 million) for payments to KPC to avoid a formal default of the national fuel supplier — Pakistan State Oil (PSO).

The ECC met here with Minister for Finance and Revenue Senator Mohammad Ishaq Dar in the chair. Minister for Power Khurram Dastgir Khan, Minister for Industries and Production Syed Murtaza Mahmud, Minister of State for Petroleum Musadik Masood Malik, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, federal secretaries and other senior officers attended the meeting, said a press release.

The Ministry of Energy (Petroleum Division) submitted a summary on the credit facility from Kuwait and presented that the Government of Pakistan is utilizing a credit facility extended by Kuwait Petroleum Corporation (KPC) against the supply of Diesel Oil under the term contract with PSO since 2000 and the term contract is extended every year.

The PSO deposits Rupee equivalent with the National Bank of Pakistan (NBP) after 30 days from the bill of lading date of each shipment and NBP transfers the cargo cost to KPC, Kuwait.

In the current situation, this account has witnessed huge exchange losses due to upheaval in the rupee-dollar parity during the last 12 months and the government is committed to cover these exchange losses.

Considering the above situation, the ECC approved an immediate technical supplementary grant of Rs27 billion for Kuwait Petroleum Company.

The ECC considered a summary of Ministry of Kashmir Affairs and Gilgit-Baltistan on Wheat supply to Gilgit-Baltistan and approved immediate release of 25,000 metric tons to GB for the months of March and April, 2023 to avoid shortage of wheat in the region, especially during the holy month of Ramazan.

Keeping in view the current wheat price, the ECC granted an additional amount of Rs 2.9 billion through Technical Supplementary Grant to meet urgent requirement of Gilgit- Baltistan.

The ECC further directed the Ministry of KA&GB to submit a comprehensive plan for price rationalization in consultation with stakeholders concerned for consideration of the ECC within 30 days.

The ECC also approved a summary of the Ministry of Kashmir Affairs and Gilgit-Baltistan for the immediate release of 25,000 tonnes of wheat to Gilgit-Baltistan for March and April to avoid shortages during Ramazan.

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