File photo of Finance Minister Miftah Ismail, courtesy PID
The Economic Coordination Committee (ECC) on Thursday decided to end a ban—imposed in May—on imports of “non-essential and luxury items” but noted that restrictions will remain in place for imports related to automobiles, cellphones and other electronic items.
Chaired by Finance Minister Miftah Ismail, the ECC meeting was informed that the two months the ban had been in place had reduced the import bill by 70 percent, from $399.4 million to $123.9 million. It was noted that the major contribution to this reduction of about $275 million was from automobile and mobile phones, which comprised 79 percent of the total import reduction. The remaining 21 percent, it was learnt, was spread over 810 tariff lines, impacting multiple sectors of the economy, including foreign investments.
The ECC also approved clearance of all consignments that had arrived at ports after July 1—barring the excluded items—after the receipt of a 25 percent surcharge.
Wheat import
During the meeting, the Ministry of National Food Security and Research submitted a summary seeking urgent advice on the award of the fourth International Wheat Tender 2022, which launched on July 25. It said six international suppliers had participated in the process, with five offering bid rates. The ECC meeting approved the lowest bid offered by Falconbridge FZ LLC at the rate of $407.49 per ton CFR bulk on a sight-letter-of-credit basis.
The ECC also approved domestic gas supply to Fatima Fertilizer’s Sheikhupura plant and Agritech and advised the Trading Corporation of Pakistan to negotiate cheat wheat imports from Russia. Among other measures approved was $11.6 million in goodwill compensation for Chinese nationals who perished in a terror attack at the Dasu hydropower project last July.
Fuel dealers
The ECC approved a 70 percent increase in dealers’ commission on the sale of high-speed diesel, from Rs. 4.13 to Rs. 7/liter. Similarly, dealers’ commission on the sale of petrol was increased by 43 percent from Rs. 4.9 to Rs. 7/liter. The increase, the ECC was informed, was on the basis of an agreement reached with dealers in 2018 by then- prime minister Shahid Khaqan Abbasi and Minister of State for Petroleum Musadik Malik.
The ECC was informed that the increase to the commissions was necessary as dealers had threatened to go on strike. It was also told that dealers had initially demanded Rs. 14/liter as commission but this had been halved to Rs. 7/liter. According to local media, oil marketing companies are likewise demanding an increase in their margins of Rs. 7/liter from the existing Rs. 3.68 on both diesel and petrol, but this issue would be taken up separately so the price differential could be passed on in phases.