ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Pakistan govt allows sugar export to Iran
Publication Date : 31-07-2013
Pakistan's government on Tuesday, allowed sugar export to Iran against electricity import. It also allowed continued higher margins to oil-marketing companies (OMCs) and petroleum dealers, and put an immediate ban on import of gold and export of live animals.
The decisions were made at a meeting of the Cabinet's Economic Coordination Committee (ECC), presided over by Finance Minister Ishaq Dar. The meeting also agreed that rules on the import of liquified natural gas (LNG) should be strictly enforced to ensure transparency.
The ECC was informed during the meeting, that Prime Minister Nawaz Sharif had approved a summary through which all ECC decision would be considered final, and would not require the Federal Cabinet's approval as before.
The ECC's decisions would only be dispatched to the various divisions of the Cabinet for their perusal.
During the meeting it was agreed that a ban would be imposed on gold import into the country for 30 days, to improve various import schemes. This decision was made following reports that duty-free gold import facilities were being exploited for illegal export to India, which goes against national interest.
This has also brought about an "enormous and abnormal surge" in gold import into Pakistan recently, under various schemes.
Between January to June this year, 92.97 billion Pakistani rupees (US$913 million) worth of gold was imported into the country, compared to 19.13 billion rupees ($18 million) during the same period last year.
This trend saw a sharp spike when gold import shot up to 52.55 billion rupees ($516 million) in the first 26 days of July.
The ECC was also informed that the Indian government had, in the past few months, been consistently discouraging the import of gold.
To regulate gold import, India increased import duty over the commodity by 4 percent in January this year, and by an additional 4 percent in May. There were also reports that the amount of smuggled gold siezed by Indian authorities shot up by 365 percent between April and June.
This difference in import duties seem to have provided incentives for increased duty free imports by Pakistan and smuggling into India.
With this in mind, the ECC imposed the 30-day import ban to re-examine and revise the available import schemes to ensure legitimate trade of the commodity.
The ministry of commerce has pledged itself to implement this decision in letter and spirit.
The committee also placed a ban on export of live animals effective October 1, to encourage the export of processed meat from Pakistan, and provide by-products such as hide, bones, blood and tallow to downstream industries.
While allowing continuation of slightly higher margins to OMC and dealers on sale of petroleum products, the ECC directed the ministry of petroleum to carry out a study, with the assistance of the Oil and Gas Regulatory Authority (OGRA) to establish a basis for revision of the margins within 45 days and submit it for consideration.
The ECC also approved export of 30,000 tonnes of wheat to Iran as part of a barter trade agreement with Iran against electricity imports.
The meeting was also informed by the aviation division secretary that Pakistan International Airlines had paid 6.1 billion rupees to vendors, out of the 6.89 billion released to them by the ministry of finance, and that 789 million had been paid to the Export-Import (Exim) Bank to repay loans.
The PIA and the Federal Board of Revenue (FBR) have also reconciled their accounts and 250 million rupees have been paid to the FBR.
The committee directed the ministry of aviation to present a viable plan to overcome PIA's annual loss of 3.3 rupees, including a breakdown of present losses, and how to go forward.
The ECC also approved the renewal of government guarantee for running a finance facility of 2 billion rupees for Pakistan Steel. It directed that no exemption would be allowed on procurement rules for LNG or awarding of contracts for construction of storage and regasification terminals, to ensure transparency.
The meeting was informed that the ministry of planning and development had submitted a report on the reasons and causes for cost escalation in the different components of the Nandipur Combined Cycle Project, which was currently estimated at 58.4 billion rupees.
This tentative cost may be changed subject to actual cost increase, based on insurance duty construction rates, dollar fluctuation, taxes, cost of gas component inclusion and damage to equipment.
The meeting was informed that the expenditures estimate will be made on actuals after validation, and special monitoring arrangements will be made by the power ministry, which has been asked to share the report with Transparency International.
*US$1 = 101.83 Pakistani rupees