Finance Minister Shaukat Tarin has assured the cabinet that the government will fix responsibility on those involved in expensive sugar import, which caused a huge loss to the national exchequer.
During discussion in a recent cabinet meeting, a parliamentary member pointed to the loss to the national purse caused by the import of sugar at a higher price due to delay in decision making and demanded that responsibility be fixed.
The finance minister gave assurances that a probe was being conducted and those responsible for indecision and delay in imports would be proceeded against.
He told the cabinet that the difference between the cost of imported sugar and the price of Rs89.75 per kg fixed by provinces would be picked by the federal government.
It was pointed out that beverages, biscuits, candies, etc consumed 70% of the national sweetener requirement while the general public consumed only 30%. It
was suggested that industries and production, and food security and research secretaries should jointly develop a mechanism for subsidising only 30% of sugar being consumed by the general consumers and present it for review by the minister for finance.
Relevant ministries briefed the cabinet that sufficient stocks of sugar and wheat were available in the country and there could not be any need for more imports.
The finance minister was of the view that although the stock position was satisfactory, it would be prudent to keep strategic reserves to cope with any eventuality.
Earlier, in January 2021, the Economic Coordination Committee (ECC) and the federal cabinet decided to import 500,000 tons of sugar. However, the Trading Corporation of Pakistan (TCP) imported only 100,000 tons and scrapped a number of tenders for sugar import without giving any reason.
ECC members noted that there seemed to be no reason for delaying sugar purchase through imports immediately after the decision of the ECC and the cabinet in January 2021.
The ECC constituted a committee, headed by the Finance Division secretary and comprising Industries and Production Division secretary, Commerce Division secretary, National Food Security and Research secretary and Law and Justice Division secretary.
The committee was tasked with looking into the reasons for delay in the procurement of sugar. The committee was also asked to probe the factors behind the scrapping of tenders and the authority who took the decision.
Apart from that, the committee would look into the financial loss suffered due to late import of sugar.
The Ministry of Industries and Production briefed the committee about the financial arrangement for sugar import.
It submitted proposals for the import of remaining 400,000 tons for building strategic reserves, as per the cabinet decision.
It requested for approval of an additional amount of Rs27 billion, which would take the total to Rs45 billion, for import of 400,000 tons of sugar.
It said that the Finance Division might arrange Rs45 billion through a supplementary grant or any other financial arrangement for the import and storage of sugar for three months.
The fund calculation was based on the per ton landed cost in the last tender floated by TCP and the TCP warehousing cost.