Challenging potato hoarders: ECC approves duty-free import to control prices

Forms committee to consider gas supply to Tuwairqi Steel Mills.


Shahbaz Rana July 17, 2014

ISLAMABAD:


The government has allowed duty-free import of 100,000 tons of potatoes in a bid to arrest rising prices of the commodity in the domestic market apparently caused by hoarders.


The Economic Coordination Committee (ECC) of the cabinet also extended the duty-free import period to mid-November – the time when it expects the new crop to arrive in the market.

It has already approved import of 200,000 tons of potatoes at zero duties but the decision could not keep a check on increasing prices.

In the retail market, the shopkeepers are selling the commodity at Rs80 to Rs90 per kg, while in wholesale the rate is Rs72 per kg.

According to officials of the Ministry of National Food Security, this year potato production has remained less than the target but it is sufficient to meet domestic needs. However, they added, hoarders were manipulating the market.

Four months ago, Finance Minister Ishaq Dar had warned that the government would take strict action against the hoarders but the warning fell on deaf ears as the government lacked administrative powers to crack down on the manipulators in provinces.

However, it has yet to exercise its powers to take action against the hoarders operating in the federal capital.

The ECC allowed duty-free import in order to bring down the prices manipulated by hoarders and middlemen, according to a press release issued by the Ministry of Finance.

The ECC was told that if immediate duty-free import was not allowed, potatoes would be sold at very high prices during Ramazan. In this context, the finance minister approved appropriate measures to control the prices, in coordination with provincial governments, it added.

Gas for Tuwairqi Steel

The ECC formed a committee to review the possibility of giving natural gas to Tuwairqi Steel Mills at concessionary rates.

The Ministry of Industries and Production had sent a summary for the supply of natural gas as feedstock to Tuwairqi Steel Mills.

The company signed an MoU with the government of Pakistan on May 28, 2004 for 40 million cubic feet of gas per day (mmcfd) as feedstock and 30 mmcfd as fuel at the same rates as applicable to other such industries.

The committee will study all aspects of the MoU and present a report to the ECC. The finance minister suggested that agreements should be based on well thought out plans and promises that were not implementable should not be made.

He also directed the ministries concerned to prepare an integrated energy plan for the next four years which could include parameters for investment, power generation, distribution and transmission.

Biomass for power production

The ECC also considered a summary of the Ministry of Water and Power for approval of fiscal incentives for biomass-based power generation projects on the model of independent power producers.

The ECC was informed that the draft energy purchase agreement and draft implementation agreement for biomass projects were based on cost-plus formula.

It turned down the proposal and decided that there should be no place for cost-plus purchase agreements. Instead, the upfront tariff approved by Nepra should also be applied to biomass and biogas projects.

The committee directed that no specific contract between two parties should be brought up before it for consideration and only standardised draft agreements would be considered.

Published in The Express Tribune, July 18th, 2014.

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COMMENTS (3)

KK Kool | 6 years ago | Reply

What a good decision by Mr Ishaq Daaar. Instead of taking action against the culprits he decided to tax on the already dilapidated balance of payment. What a good strategist he is. Congratulations Mr Dar keep it up. Pakistan will prosper with such decisions. I hope importer will be your relative. If not please do that as well.

usman786 | 6 years ago | Reply

grab potatos from hoarders and give them for free like Commissioner Karachi

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