Pakistan. Urea export allowed by ECC

24.01.2017

The Economic Coordination Committee (ECC) of the Cabinet has allowed the export of 0.3 million tons of urea and decided to continue a Rs 200 subsidy on each bag of urea fertilizer for the remaining six months of the current fiscal year. The subsidy on urea fertilizer was discontinued after a subsidy of Rs 27.96 billion in the form of cash and taxes announced by the Finance Minister in his budget speech was consumed during the first six months of the current fiscal year.

The government was providing a cash subsidy of Rs 300 on DAP per bag, while urea fertilizer per bag was being subsidised by Rs 390, with Rs 156 cash and Rs 184 GST while Rs 50 per bag cost was reduced by the manufacturers on the request of the federal government.

Provincial governments said to have approached the federal government against the withdrawal of subsidy on urea fertilizer and Punjab being the major user was on the forefront. On the request of the provincial governments, Prime Minister Nawaz Sharif announced continuation of the subsidy for the remaining six months as well and Ministry of National Food, Security and Research put up the proposal to the ECC for continuation of subsidy in the light of the Prime Minister''s decision.

The ECC meeting chaired by Finance Minister Ishaq Dar on Monday endorsed the Prime Minister''s decision for continuation of the previous fertilizer subsidy scheme for fiscal year 2016-17 on the same terms, conditions and modalities. The government is paying a Rs 200 per bag subsidy to support the farming community and agriculture sector.

The ECC also approved the export of 0.3 million tons of urea fertilizer till April 28, 2017 without any subsidy including Rs 200 provided to farmers. The meeting decided that the export quantity will be monitored by the State Bank of Pakistan (SBP) like the mechanism adopted regarding sugar exports. Fertilizer Review Committee (FRC) will monitor domestic prices of urea on a monthly basis and in case of abnormal increase in retail price as per weekly sensitive price index, the FRC will recommend to the ECC for discontinuation of further exports.

The permission of export was given in view of around one million metric tons surplus urea fertilizer in the country. The ECC approved, in principle, the payment of outstanding claim of PASSCO on account of supply of wheat in 2008-2009, and directed the Ministry of National Food Security & Research and PASSCO to reconcile the outstanding amount with the Ministry of Finance. The meeting also invited the recently retired Secretary Finance Dr Waqar Masood Khan and Chairman Federal Board of Revenue (FBR) Nisar Muhammad to recognise their services. Both retired officers participated in the ECC as ex-officio members.


brecorder

Readers choice: TOP-5 articles of the month by UkrAgroConsult