Squeezed NATO supply line runs dry

Pakistan bans export of fuel to Afghanistan, scraps controversial sugar tender.

ISLAMABAD: Stepping up pressure on an already-squeezed supply line, Pakistan on Thursday imposed a ban on export of petroleum products to Afghanistan and Central Asia, meant for Nato troops posted in the region.

The decision was taken in a meeting of the Economic Coordination Committee of the Cabinet (ECC) – the country’s highest economic decision-making body, headed by Finance Minister Dr Abdul Hafeez Shaikh.

The import is being practiced only on paper, and all these petroleum products are being sold in Pakistan after going through the export process, said the ministry of petroleum and natural resources in a justification given to the ECC.

The government was also facing criticism for providing subsidised products to Afghanistan at a time when domestic consumers are subject to heavy taxation. The petroleum ministry officials said around 850,000 tons of jet fuel, consumed by Nato forces, is exported to Afghanistan per year.

Pakistan had also been exporting 150,000 tons of high-speed diesel and 100,000 tons of petrol at subsidised rates since 2002-03.

Sugar tender scrapped

The ECC also scrapped a tender issued on November 12 for procurement of 200,000 tons of sugar from Pakistan Sugar Mills Association (PSMA) after reports surfaced that the government wanted to procure the commodity at higher rates and amended tender documents to favour influential barons.

A sub-committee, constituted by the ECC, recommended to procure sugar at Rs63,000 per ton, amounting to Rs63 per kilogramme, while the commodity is available in the market at Rs50,000 per ton.

The ECC decided that purchase of sugar will be re-tendered, with certain modifications in the tender terms, while all manufacturers can participate in the bidding process, after ECC members protested against dealing with PSMA which has been declared a cartel by the Competition Commission of Pakistan.

The committee directed the Trading Corporation of Pakistan to issue a tender and finalise the process in the next 10 to 12 days.

“Had the tender been cleared by the ECC, it would have resulted in violation of public procurement regulatory authority rules,” said TCP Chairman Tahir Raza Naqvi.

“Any procurement above Rs50 per kg will turn into a scandal for the government,” said Rana Farooq Saeed, a member of the National Assembly standing committee on commerce.

The ECC also decided to allow seven blacklisted sugar mills to participate in the bidding process, provided they deposit the original amount along with markup and penalties. These mills had defaulted on the 2008 tender and had refused to return the amount. They still owe Rs2.2 billion to the government.

Ban on import of CNG kits

The ECC approved a ban on import of CNG cylinder and conversion kits in the wake of current gas shortage in the country. Installation of new CNG kits in vehicles will be banned and no new licence would be issued in this regard, the ECC decided.

The ECC also reviewed its gas load management programme for current winters, for Sui Northern Gas customers, and decided to withdraw its earlier approval of gas supply to independent power producers due to severe expected gas shortages.

Published in The Express Tribune, December 16^th, 2011.