Home Latest News ECC Approves Rs. 27b Grant for PSO to Avoid Default

ECC Approves Rs. 27b Grant for PSO to Avoid Default

Cabinet body also approves release of 25,000 tons of wheat to Gilgit-Baltistan to avoid shortage of commodity in region

by Staff Report

Photo courtesy PID

The Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved a Rs. 27 billion technical supplementary grant for the Kuwait Petroleum Company (KPC) to prevent Pakistan State Oil (PSO) from defaulting.

Chaired by Finance Minister Ishaq Dar, the meeting reviewed a summary submitted by the Petroleum Division on a credit facility extended by the KPC to the Government of Pakistan for the supply of diesel oil. Noting that the contract had been operational since 2000, with annual extensions, it said that the PSO deposits rupee equivalents of payments for each shipment to the National Bank of Pakistan (NBP) 30 days after the landing date. The NBP subsequently, it added, transfers the cargo cost to the KPC.

Emphasizing that the PSO’s account had suffered significant losses due to the drastic devaluation of the Pakistani rupee in the past year, the report said that the Government of Pakistan was committed to covering their exchange losses. In this regard, the ECC approved an immediate technical supplementary grant of Rs. 27 billion for the KPC.

Wheat supply

The ECC also considered a summary of the Ministry of Kashmir Affairs and Gilgit-Baltistan seeking supply of wheat to GB to avoid shortage of the commodity in the region. Approving the immediate release of 25,000 tons of wheat to GB for March and April, the cabinet body also granted an additional Rs. 2.9 billion to meet the urgent requirements of the region in view of the prevailing wheat prices. The ECC further directed the relevant ministry to submit a comprehensive plan for price rationalization in consultation with stakeholders concerned for the body’s consideration within 30 days.

Apart from the finance minister, the meeting was also attended by Power Minister Khurram Dastgir-Khan; Industries and Production Minister Syed Murtaza Mahmud; Minister State for Petroleum Musadik Malik; Special Assistant to the P.M. (SAPM) on Finance Tariq Bajwa; SAPM on Revenue Tariq Mehmood Pasha; and relevant federal secretaries and other senior officers.

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