Islamabad December 22 2022: The Economic Coordination Committee (ECC) of the Cabinet here on Wednesday deferred a summary submitted by Ministry of Energy (Petroleum Division) for foreign exchange coverage to PSO and directed the Ministry of Energy to resubmit the summary after reviewing the numbers.
Pakistan State Oil (PSO) requested urgent PKR 17 billion to honour its liabilities to international firms, particularly its long-term fuel supplier Kuwait Petroleum Company (KPC).
The Petroleum Division reported that under a credit facility provided by KPC since 2000 and extended annually for the supply of diesel, a joint account of the federal government and KPC had been set up with the National Bank of Pakistan in which PSO keeps on depositing rupee equivalent funds after 30 days of the bill of lading for each shipment. After 90 days from the bill of lading, the NBP has to transfer the cargo cost to KPC and exchange cover for an additional 60 days is borne by the federal government.
However, the account facility started to face huge shortfalls in April 2020 on account of exchange losses, posing a default situation in remittances to KPC. At the time the ECC approved a supplementary grant of Rs12bn which helped PSO avoid an international default. The facility worked well for another two years but then suffered a shortfall again and now this shortfall stood at Rs17bn owing to “prevalent upheaval” in the rupee-dollar parity.
The Petroleum Division said to dawn that the PSO had been defaulting even on rupee deposits in the NBP account because of its liquidity challenges as its receivables reached Rs612bn and “it urgently required adequate funds so that liabilities are met on time”.
ECC also approved technical supplementary grants of Rs1022.750 million for Baluchistan fishermen and Ghurki Trust teaching Hospital (GTTH), Lahore.
According to press statement issued by finance ministry, Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar presided over the meeting.
Considering the summary of Ministry of Maritime Affairs, the committee approved TSG in aid of Rs. 822.750 million enabling Gwadar Port Authority (GPA) to disburse the amount of Rs. 250,000/- per head to 3291 fishermen registered with Baluchistan Fisheries Department for the purchase of boat engines.
The ECC also approved TSG in aid of Rs. 200 million in favour of Ministry of National Health Services, Regulation and Coordination for Ghurki Trust teaching Hospital (GTTH), Lahore.
Ghurki Trust teaching Hospital (GTTH) is a tertiary care non-profit organization providing “State of the Art” health facilities to the needy & poor patients.
The committee considered a summary of Ministry of Energy (Petroleum Division) on assignment of working interest in exploration licenses/blocks and approved transfer of 30% working interest of M/s MoL to M/s MPCL in Margala Block.
It was apprised that Margala Block is governed by Pakistan Petroleum Exploration and Production Rules 2001. The acquiring company M/s MPCL is operating in Pakistan since 1954 and has working interests in 23 exploration licenses and 15 development & production leases.
The ECC was further informed that M/s MOL has cleared all its financial obligations, the statement added.
Among others, the meeting was attended by Federal Minister for Commerce, Syed Naveed Qamar; Federal Minister for National Health Services, Regulations and Coordination, Abdul Qadir Patel; MNA/Ex-PM, Shahid Khaqan Abbasi; Minister of State for Finance and Revenue, Dr. Ayesha Ghous Pasha; SAPM on Finance, Tariq Bajwa; SAPM on Revenue, Tariq Mehmood Pasha; SAPM on Government Effectiveness, Dr. Muhammad Jehanzeb Khan; Coordinator to PM on Commerce & Industry, Rana Ihsan Afzal; Coordinator to PM on Economy, Bilal Azhar Kiyani; federal Secretaries and senior officers.
