ECC approves gas import price for IPI project

[LahoreEstate]

* Asks Ministry of Petroleum to seek cabinet ratification

By Sajid Chaudhry

ISLAMABAD: Economic Coordination Committee (ECC) of the cabinet approved a ‘rationalised’ gas import price equivalent to 80 percent of the international crude oil price on Thursday, removing the final obstacle in the $7.8 billion gas pipeline project with Iran.

The decision was made in a meeting chaired by Finance Adviser Shaukat Tareen at the Prime Minister’s Secretariat.

According to sources, Pakistan and Iran would soon sign the much-awaited Gas Sale and Purchase Agreement (GSPA) to enter the implementation phase of the project.

Earlier, Pakistan had asked Iran to lower the price to the equivalent of 70 percent of the price of crude oil in the international market.

In the recent bilateral talks, Tehran declined to show flexibility on the price, asking Islamabad to “take it or leave it”, the sources said.

According to an official statement, the decision was made considering a Ministry of Petroleum summary seeking the approval to sign the GSPA at the offered price, “envisaging import of one billion cubic feet per day of natural gas, constituting 25 percent of Pakistan’s current gas production in order to support 5,000 megawatts of power generation”.

The ECC advised the Ministry of Petroleum to seek approval from the cabinet before signing the GSPA with Iran. The committee also considered a Ministry of Commerce summary seeking permission for bilateral trade with India through the Wagah-Attari road link and approved the proposal for the development of the required infrastructure to facilitate the trade of 14 items initially. Subsequently, the route would facilitate the import of essentials as well as raw material for export-oriented industries. The decision has been made in the light of an agreement between the Pakistani president and the Indian prime minister in a 2008 meeting in New York to implement the project in a phased manner commensurate with parallel development of infrastructure on both sides of the border. The ECC also directed provincial governments to take action against hoarders of eatables and keep a constant check on food supply chain mechanisms in the markets to ensure availability of all essentials. “Relief to the common man should be the primary focus of provincial governments,” a statement quoted the committee members as saying. The ECC formed a surveillance committee consisting of federal, provincial and local government representatives to look into price control matters and submit actionable recommendations.

In other decisions, the ECC directed the Trading Corporation of Pakistan to meet wheat requirements of Sindh on priority, and empowered the Federal Board of Revenue (FBR) to give exemption on regulatory duty to franchised food chains for importing potato chips.

http://www.dailytimes.com.pk/default.asp...2009_pg7_3