Govt abolishes regulatory duty on export of potatoes

ISLAMABAD: The federal government on Wednesday abolished 25 per cent regulatory duty on export of potatoes as it claimed that higher domestic production of the commodity had ended the price-crisis in the country.

The decision to abolish the duties with effect from December 20 was taken by the Economic Coordination Committee (ECC) of the Cabinet, headed by Finance Minister Ishaq Dar.

The ECC also approved a modified policy for establishment of on-site power plants aimed at bringing 1000 megawatts of electricity in the system as short-term solution to the energy crisis.

The ECC abolished the regulatory duty on potato on the recommendation of Ministry of National Food Security & Research, paving the way for export of potatoes, according to a handout issued by Ministry of Finance.

The meeting was informed that this year farmers had planted the crop on 10% larger area and abundant yield was on the cards, with a surplus of the commodity.

However, there was no independent verification of the claim and decision is said to have been taken to give benefits to growers at the expense of consumers. While lifting the duties, Dar directed to setup a committee comprising Secretary Commerce and Secretary National Food Security to closely monitor the market situation and keep the ECC updated regularly.

“Interest of the local consumers is also to be kept in view”, finance minister said.

In May this year, the ECC had imposed 25 per cent regulatory duty on export of potatoes in a move aimed at curbing soaring prices. It had also allowed import of the commodity by waiving off duties. At that time the price of potatoes was hovering around Rs90 per kilogram.

According to latest price bulletin of Pakistan Bureau of Statistics, the potato prices remained in the range of Rs50 per kilogram to Rs60 per Kg, depending upon the market and the city. There are apprehensions from certain sectors that the prices may start increasing, as the growers begin exports.

On-site power plants

The economic body also approved Ministry of Water and Power’s proposal regarding Modified Policy Framework for on-site private power projects based on interim gas supply with fresh amendments. The Ministry of Petroleum had sought amendments to the conditions on currency required to be quoted in the bids and enhances in period of commercial operation day.

The on-site power generation of 1000MW by using discovered gas which has not been injected into pipeline system is part of the government’s plan to increase power generation.

The Federal Board of Revenue made it clear that no new SRO will be issued to facilitate the on-site power projects, however the investors may avail benefits under existing provisions.

Under the on-site policy, the power distribution companies have already advertised for 10 gas fields as indicated by the Ministry of Petroleum and Natural Resources as sites for these projects.

The ECC also approved an agreement between Thermal Power Station Guddu (GENCO- II) and M/s Engro for use of 60MMCFD gas from Mari shallow by M/s Engro till December 2015.

The body also approved public disclosure of Pakistan Energy sector Reform-Quarterly Progress Report of Development Policy Operations. The multilateral lending agencies are helping to develop the programme aimed at closely monitoring the sector’s performance.

The plan covers tariff management, improvement of sector wise performance, incentivizing private sector participation and improvement of accountability and transparency. The Asian Development Bank is providing $20 million loan for this purpose.