ECC okays proposal to issue the letter of comfort in PSO’s aid

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ECC

ISLAMABAD: The Economic Coordination Committee (ECC) on Thursday approved the proposal to issue a letter of comfort in favour of Pakistan State Oil (PSO) for raising a loan facility of Rs. 50 billion on urgent basis.

Federal Minister for Finance and Revenue, Miftah Ismail presided over the ECC meeting while among others it was attended by Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Member National Assembly/former Prime Minister Shahid Khaqan Abbasi, Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, Minister of State for Petroleum Musadik Masood Malik, SAPM on Government Effectiveness Dr. Muhammad Jehanzeb Khan, Coordinator to the PM on economy Bilal Azhar Kayani, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal, Federal Secretaries and senior officers attended the meeting, said a press release issued by finance ministry.

The Ministry of Energy (Petroleum division) presented a summary on syndicated running finance facility for PSO and informed that PSO’s liquidity issues were discussed in the meeting on 31st July, 2022 in which it was also discussed to arrange a government guarantee loan to ease out liquidity issues of PSO.

A consortium of banks was formed including Allied Bank Limited (ABL), National Bank of Pakistan (NBP), Muslim Commercial Bank (MCB), United Bank Limited (UBL) and Habib Bank Limited (HBL) for sanctioning a loan amounting to Rs 50 billion to PSO through a government guarantee.

As the issuance of guarantee will take time, the banks have shown their willingness to initiate the process of issuing loan on letter of Comfort.

The ECC approved the proposal to issue a letter of comfort in favour of PSO for raising a loan facility of Rs. 50 billion on urgent basis.

However, Finance Division to divert some other allocated guarantees to PSO without exceeding Rs 105 billion domestic guarantee limit for the 1st quarter of CFY.

Ministry of Aviation submitted a summary regarding issuance of GoP guarantee in favour of National Bank of Pakistan.

It was informed that Roosevelt Hotel Corporation (RHC) is owned by Pakistan International Airlines-Investment Limited (PIA-IL).
The hotel business was slow down in USA (United States of America) and around the world due to Covid-19 pandemic. RHC was shut down in December, 2020 to avoid losses.

A committee headed by Deputy Chairman Planning Commission was constituted to look into the financial challenges of RHC.

The ECC on 2nd September 2020, approved GoP support of US$ 142 million on the recommendation of the committee.

Finance division arranged financing facility as loan from National Bank of Pakistan. The ECC after discussion approved GoP guarantee for financing facility of US$ 142 million as loan in accordance with facility agreement between Roosevelt Hotel Corporation (RHC) and the National Bank of Pakistan (NBP).

Ministry of Industry and Production tabled a summary for revision of price of imported Urea. It was informed that the price of imported Urea stored in National Fertilizer Marketing Limited (NFML) warehouses is lower than locally manufactured Urea.

In order to remove disparity in the prices of imported and locally manufactured Urea, the ECC approved the proposal that Dealer Transfer price (DTP) of 50 kg imported Urea may be revised upward at Rs. 1805/bag by NFML (exclusive of dealer margin of Rs. 145/bag) for the stocks sold between June 23 to July 25,2022.

Further DTP of remaining stocks held with NFML may further be revised upward to Rs. 2150/bag (exclusive of dealer margin of Rs. 50/bag) with effect from July 26, 2022 onwards.

The ECC further directed to fix the Urea pricing and dealer margin in future with prior approval of the ECC. — APP