ECC allows releasing Rs2bn outstanding claims to sugar mill owners

ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet has directed the Finance Division to release the outstanding claims, worth Rs2 billion, to sugar mills owners.

The ECC meeting was held on Tuesday under the chairmanship of Finance Minister Asad Umar. The committee on the occasion took up the sugar export issue on a proposal moved by the Ministry of Commerce.

With regard to the outstanding claims of previous years, the committee directed the Finance Division to release the budgeted amounts.

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Sources said that Pakistan Sugar Mills Association (PSMA) had claimed the outstanding payment to the tune of Rs16 billion, whereas the Ministry of Industry and Commerce gave an approval to release only Rs2 billion.

The forum approved the export of an additional 0.1 million tonnes of sugar. The government had earlier approved the export of one million tonnes of sugar. However, owing to high cost, sugar mills did not export the sugar.

It is pertinent to mention that Pakistan Muslim League-Nawaz government had allowed sugar mills to export 3.2 million tonnes of sugar in five years. Besides, the previous government had also given more than Rs20 billion subsidy to sugar exports.

The ECC approved waiving off the condition related to start of sugar crushing season on 15th of November.

Earlier, PSMA had warned the government that if their issues pertaining to sugar price and export are not addressed, they would not start the crushing season.

The committee observed that the matter relating to freight support for exports fall in the domain of the respective provincial governments.

The ECC discussed a report submitted by Ministry of Industries and Production on measures to ensure availability of Urea fertilizer in the country and the possible impact on the price of urea owing to use of RLNG due to the shortage of system gas in winter.

Ministry of Industry informed the meeting that SNGPL may be given Rs167/mmbtu subsidy for supply of gas to Fatima Fertilizer and Agri Tech for the gas consumed at 62:38 blend till December 7, 2018. Besides this, Rs869/mmbtu on the supply of 100 per cent RLNG to these plants from December 8 to January 1, 2019.

The amount of Rs0.79 billion may be paid forthwith on actual basis and Rs3.91 billion approximately may be paid in two monthly tranches on December 7, 2018, and January 7, 2019, that is subject to final reconciliation.

Sources said that representatives of the Finance Division did not agree to the proposed mechanism of subsidy and insisted that it should be ex post facto and on actual basis. However, in view of the huge impact on the liquidity of plants, MoIP remains firm on the proposal that the plants should be facilitated in order to keep them operational.

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