ISLAMABAD: Pakistan formally decided on Monday to import 300,000 tonnes of wheat from Russia on a government-to-government (G2G) basis and approved a 63% rise in commission to oil marketing companies (OMCs) on the sale of petroleum products.
Ishaq Dar, the finance minister, served as the meeting’s chairperson. The Economic Coordination Committee (ECC) of the Cabinet made the decisions.
The Ministry of Commerce provided an overview of the G2G purchase of wheat from Russia in relation to wheat imports. It claimed that between November 1 and January 15, 2023, Pakistan may receive 300,000 tonnes of a specific milling wheat at a price of $372 per tonne from the M/s Prodintorg, a state-owned company of the Russian Federation.
The Russian wheat met the requirements of the Ministry of National Food Security and Research, according to the Trading Corporation of Pakistan (TCP). Additionally, it stated that M/s Prodintorg’s bank information had been checked, confirming that as of October 31, 2022, it was not an organisation that had been sanctioned worldwide.
63 percent more profit for petroleum sellers is approved.
The TCP further stated that a memorandum of understanding (MoU) and mutually agreed-upon terms and conditions for the contract to be officially signed by the TCP and Prodintorg for the delivery of wheat under G2G arrangements had also been signed. The bid validity, which had run out during the processing time, has, however, also been extended until 18:30 on November 1 (PST).
Since Russia’s war on Ukraine early last year, which prompted international sanctions, there has been much discussion about importing wheat, oil and gas products, and other goods from Russia; however, the only issue to have proceeded in implementation is the import of wheat.
Read: Russian trade
The ECC also authorised a 63 percent increase in OMC’s sale margins on petroleum products from the current rate of Rs3.68 per litre for gasoline and diesel to Rs6 per litre, under the condition that there be fiscal room in POL pricing.
After reaching an agreement with petroleum dealers for a rise in their margins of 70% to Rs7 a litre, the government team led by former prime minister Shahid Khaqan Abbasi committed to the hike in a meeting with OMCs on August 2.
The dealer commission for the sale of high-speed diesel (HSD), which was previously set at Rs. 4.13 per litre, was increased by 70% on July 28 by the ECC. In addition, it raised dealer commission on gasoline sales by 43 percent to Rs7 per litre from Rs4.90.
In the entire nation, this was the biggest margin increase that could be made all at once. The meeting was informed that, starting in December 2021, or just seven months ago, dealers’ profit margin on the sale of HSD and gasoline had also climbed by more than 25 percent. Since December 2021, the combined dealer commission on gasoline and HSD has increased by 79 percent and 112 percent.