The Cabinet’s Economic Coordination Committee (ECC) has approved the auction of 500,000 tonnes of wheat held by PASSCO, including 300,000 tonnes of expensive imported wheat, to be sold at subsidised rates. The decision could result in a financial loss of Rs20.5 to Rs22 billion to the national exchequer.
The ECC meeting was chaired by Finance Minister Muhammad Aurangzeb. Officials informed the committee that 294,994 tonnes of wheat imported in 2022 is still lying in PASSCO warehouses. The federal government has already decided to wind up PASSCO, making disposal of surplus stocks a priority.
The ECC approved selling the wheat through competitive bidding to reduce excess stock, cut storage costs, stabilise domestic wheat prices, and ensure food security. While the Finance Division had proposed reserve prices of Rs4,742 per 40 kg for local wheat and Rs6,425 per 40 kg for imported wheat, the ECC approved significantly lower prices: Rs4,400 for local wheat and Rs4,070 for imported wheat.
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At these rates, selling imported wheat would incur a loss of Rs2,355 per 40 kg, leading to an estimated overall loss of up to Rs22 billion on the 500,000 tonnes. However, officials noted that the annual cost of storing this wheat exceeds Rs11 billion, and the stock continues to lose market value over time.
PASSCO currently holds around 2 million tonnes of wheat. The ECC also approved the supply of 300,000 tonnes of PASSCO wheat to the Punjab government to maintain adequate supply for flour mills, stabilise prices, and ensure uninterrupted availability of wheat flour.
Punjab had requested wheat at Rs3,900 per 40 kg, but PASSCO’s cost stood at Rs4,742 per 40 kg. The matter was referred to Deputy Prime Minister Ishaq Dar, who authorised the sale at Rs4,150 per 40 kg. The ECC endorsed this decision, which will result in an additional loss of Rs4.4 billion to the federal government on the Punjab sale alone.
The Finance Ministry will provide around Rs20 billion in subsidies to dispose of the wheat stock, with Rs9 billion to be paid immediately. Critics say the decision highlights poor economic and trade planning, as the government first imported costly wheat and is now forced to sell it at subsidised prices.
In other decisions, the ECC approved:
- Rs10.98 billion as a technical supplementary grant to clear Pakistan Post Office dues to utility companies.
- Rs29.663 billion for the Federal Directorate of Immunisation to ensure vaccination coverage for children.
- Rs23.42 billion for imported urea subsidy, to be shared equally between the federal and provincial governments (with Rs15 billion to be released by the federal government initially).
- Grants of Rs1.9 billion for development projects in Khyber Pakhtunkhwa and Rs150 million for Cadet College Hasan Abdal.
- Provision of confiscated solar panels by FBR to the Government of Gilgit-Baltistan.
Separately, during a meeting with the German Ambassador, the finance minister reiterated the government’s commitment to economic stability, fiscal sustainability, and structural reforms, including tax reforms. Both sides reaffirmed their resolve to deepen economic ties and promote a stable, transparent, and predictable business environment to support long-term growth and investment between Pakistan and Germany.
