ZAHEER ABBASI
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has decided to impose a 5 percent GST on LNG import and exempt it from Gas Infrastructure Development Cess (GIDC).
The ECC meeting chaired by Finance Minister Ishaq Dar on Wednesday considered the proposal of Ministry of Petroleum and Natural Resources on exempting LNG import from GIDC and GST. The ECC accorded exemption from GIDC as it was not applicable on imports as recommended by the committee under the convener ship of secretary Finance with secretary P&NR and chairman FBR as members. The meeting, however, decided that a 5% GST on LNG import would be levied in any case. A participant of the meeting stated that the ECC could consider only half of the agenda items due to paucity of time and the remaining items would be taken up today (Thursday). He added that the ECC deferred approval of Textile Policy till today with directives to the official of Textile for a detailed briefing on the policy.
The ECC also allowed Port Qasim Authority (PQA) to buy or get on lease four LNG compatible Tug Boats from its own resources before January 7, 2015 as LNG shipment would be due by then. The meeting also accorded permission for their commercial use on cost recovery basis with the direction that these boats should also be used for other purposes. The ECC also decided that the charges for boat services would be mutually decided by PQA, Ministry of Port and Shipping and the Ministry of Petroleum and Natural Resources. However, the Minister for Textile Abbass Khan Afridi gave an overall briefing on the objectives of the policy. In response to a summary moved by Ministry of P&NR for exemption of LNG import from GIDC and GST, the ECC granted exemption from GIDC but decided to impose 5% GST on LNG import.
In response to a proposal moved by Finance Division to give permission to Packages Limited for equity investment abroad through a special purpose vehicle in Mauritius with initial remittance of USD 100,000, the ECC accorded approval with clear instructions that the equity/investment would not exceed US$ 15million.
The ECC also gave its consent to a proposal by Ministry of Industries and Production for directing Trading Corporation of Pakistan to ensure procurement of 0.185 million tons of urea fertilizer under SABIC facility by December 15, 2014 for the upcoming Rabi crop. The remaining quantity of 0.385 million tons may be imported as soon as possible from open global market. The foreign exchange required for the import of the stock will be approximately around $123.92 million and would involve Rs 4.19 billion as a subsidy.
The ECC disposed of a proposal moved by Ministry of petroleum and Natural Resources regarding Gas Pipeline Infrastructure Development Plan in the wake of LNG imports and anticipated indigenous supplies asking Ogra and Ministry of Petroleum & Natural Resources to mutually take a decision on going ahead with the development plan within a week.
The ECC also considered and approved a proposal moved by the Cabinet Division for amendment in the Oil and Gas Regulatory Authority (OGRA) Ordinance, 2002 to monitor/establish prices of all refined oil products after the Law, Justice and Human Rights Division’s comments that the proposed draft bill is in order and recommended to place it before the Council of Common Interests (CCI). A committee under the chairmanship of Minister for Science and Technology, Zahid Hamid had examined the issue holistically before the proposal was submitted for its approval by the ECC. The amendments are made in the rules guiding (a) Oil sector regulations which include; monitoring the prices of petroleum products in the market, definition of petroleum products, including CNG.
Also, the power and functions of Authority as well as the role of the federal government in determining the well-head gas prices, including imported gases in the pricing of natural gas, and power to determine prices without public hearing under certain conditions are specified. It also deals with imposition of fines and penalties, and determining and notifying the maximum sale prices of CNG to be charged by a licensee from a consumer for vehicular use. (b) Strengthening the administrative functions of Ogra.
