ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved to reduce duties on all five types of LPG equipment to 10 per cent from existing 25 per cent in order to promote LPG in the country.

Federal Minister for Finance & Economic Affairs Dr. Abdul Hafeez Shaikh chaired the meeting of ECC. The ECC discussed a summary on “Exemption of duties and taxes on the import of LPG Cylinders, kits and auto gas station equipment and lifting of ban on import of CNG kits”, in which Secretary Commerce had proposed to exempt all five categories of LPG equipment (LPG cylinders, LPG pumps, control panel, LPG dispensers and LPG vehicle conversion kits) from duties and taxes in order to expand LPG market. He also proposed to lift ban on CNG cylinders and conversion kits.

After due deliberation, ECC approved to reduce duties on all five type of LPG equipment in a way that duty on any equipment having more than 10% duty will be reduced to 10% and duty of those equipment having duty rate lower than 10% will remain the same. Decision on lifting of ban on CNG cylinders and kits was deferred by ECC.

In a summary, Secretary Petroleum proposed for allocation of gas to fertilizer plants from alternate sources. He said that fertilize plants would be allowed to directly negotiate gas supply arrangements with the gas producers. Since, all existing gas producing fields have already been allocated either directly to consumers in some cases or to gas utility companies in most of cases, it would not be possible to allocate gas from such gas fields.

“However, upcoming gas from existing fields and/or new discoveries may be dedicated for fertilizer sector especially the four fertilizer plants presently on SNGPL system,” the secretary petroleum added. ECC gave in principle approval to the summary provided that concept of supply of gas to power sector as first priority should not be declined. In the same way, a comprehensive plan for allocation of 256MMCFD of gas to fertilizer plants would be subsequently submitted to ECC.

A detailed discussion was held on a summary proposed by Ministry of Commerce regarding protection to the motorcycle industry of Pakistan.

Secretary Commerce presented a general tariff reduction plan for motorcycle industry and new entrant’s policy having concessionary rate of duties on different equipment in the view of recommendation of the sub-committee constituted in the previous ECC meetings. ECC reviewed multi dimensional aspects of the summary and decided to form a committee comprising DCPC, Chairman BOI, Secretary Commerce and Secretary Industries to present a detailed presentation highlighting trends, production types, importers, manufactures, rate of returns, technology type, tariff regime, barriers to new entrants and barriers to competitors in the motorcycle industry of Pakistan. In the same way presentation will cover viewpoints of new entrants, their requirements, optimal protection, viewpoint of existing producers and impact on general public. This presentation will be presented in next ECC meeting.

Secretary Petroleum presented summary for allocation of gas from new sources of Jhal Magsi South Field (Kotra Block), Tando Allah Yar and Dars Field and Nur & Bagla & Jakhro Field containing total production of 112 MMCFD.

It was proposed that the said production volume may be distributed among SNGPL and SSGC on equal sharing basis (50:50). Out of 50% share of SSGC, 20 MMCFD gas would be placed for 100MW power plant at Nooriabad Industrial Estate as per the request of Government of Sindh. After much deliberation, ECC approved 20 MMCFD gas allocation for Nooriabad Power Plant from the share of SSGC. However, the further allocation of gas will be finalized after due consultation with different stakeholders.