ISLAMABAD - The federal government has approved another massive subsidy of Rs55.48 billion for keeping oil prices unchanged on fortnightly basis despite increase in prices in international market.

Finance Minister Miftah Ismail on Sunday made the announcement to keep oil prices unchanged. Following the decision, the Economic Coordination Committee (ECC) of the Cabinet on Monday approved Rs55.48 billion payments to oil companies against price differential claims for the past 15 days. Federal Minister for Finance and Revenue Miftah Ismail presided over a meeting of the Economic Coordination Committee (ECC) of the Cabinet at Finance Division.

Petroleum Division submitted a summary for reimbursement of Price Differential Claims (PDCs) of Oil Marketing Companies (OMCs) and Refineries. The price differential is to be paid to the oil marketing companies/refineries by the government as a subsidy in the wake of government’s decision to keep the petroleum products’ prices fixed at the level notified on 1st March, 2022.

The ECC after deliberation approved supplementary grant of Rs 55.48 billion for disbursement of PDC to OMCs/refineries for the first fortnight of May, 2022. Due to continuously rising trend of oil prices in the international market, the quantum of subsidy has been on higher side.

Ministry of Industries and Production submitted a summary on import of urea and presented that govt intends to create better stock for urea fertilizer to ensure continuity of urea supply during next financial year and requested for allowing import of urea from international market in order to stabilise the local market.

ECC allows TCP to explore possibility of import of 200,000MT of urea on G2G basis and on deferred payment

The ECC after discussion allowed Trading Corporation of Pakistan (TCP) to explore the possibility of import of 200,000 MT of urea on G2G basis and on deferred payment.

Earlier, in last month, Fertilizer Review Committee had recommended to import 0.2 million tonnes of urea to fill the gap before demand peaks in June during the Kharif sowing season. The committee projected domestic production of urea would be 3.2 MMT from April-September 2022 whereas probability of urea off take would remain 3.4 MMT in the same period. The forum was also told that there would be 2% increase in agronomic demand for fertilisers in this year. It was noted that the urea sales went up by 17% in last year.

The forum noted that a significant part of urea’s demand would be met domestically, however, summary for urea import of 2 lac tonnes would be placed to fill the gap before demand peaks in June during the Kharif sowing season.

Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Minister of State for Finance & Revenue Dr. Aisha Ghous Pasha, Minister of State for Petroleum Musadik Masood Malik, federal secretaries and senior officers attended the meeting.