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Aftab Maken
ISLAMABAD: The Economic Coordination Committee approved sale of 500,000 metric tons of wheat at revised reserve prices and cleared Rs536m grant for former Pak-PWD projects.
The Economic Coordination Committee of the Cabinet on Tuesday approved the disposal of 500,000 metric tons of wheat stock held by the Pakistan Agricultural Storage and Services Corporation through competitive bidding, as the government moves to cut mounting carrying costs.
The meeting, chaired by Finance Minister Senator Muhammad Aurangzeb at the Finance Division in Islamabad, endorsed revised reserve prices of Rs4,150 per 40 kg for local wheat and Rs3,800 per 40 kg for imported wheat. The sale will be conducted on a First-In-First-Out basis to manage older inventories first.
Officials told the committee that an earlier attempt to offload the wheat at previously approved reserve prices failed after bids came in below expectations. With storage costs rising and fresh procurement cycles approaching, the Ministry of National Food Security and Research sought revised pricing to ensure timely liquidation of stocks.
Pakistan’s wheat procurement and release policy has remained under pressure in recent years amid volatile domestic output and global commodity prices. According to official data, the country produces around 28 to 30 million tons of wheat annually, making it the staple crop and a politically sensitive commodity. The government maintains strategic reserves through PASSCO and provincial food departments to stabilize prices and ensure food security.
However, high procurement volumes combined with financing and storage expenses have strained public finances. The State Bank of Pakistan has repeatedly flagged commodity financing as a contributor to circular debt–like pressures within the food supply chain. Analysts say delayed disposal of stocks adds to fiscal costs through mark-up payments and warehouse charges.
The ECC decision to revise reserve prices signals a pragmatic shift toward market-based clearance. By adopting competitive bidding and FIFO principles, the government aims to minimize quality deterioration and financial losses. Lower reserve prices may also attract broader participation from flour mills and bulk buyers amid subdued demand conditions.
In a separate decision, the ECC approved a Technical Supplementary Grant of Rs536 million for Public Sector Development Programme projects previously managed by the defunct Pakistan Public Works Department. The funds will be transferred to the governments of Punjab and Khyber Pakhtunkhwa to complete specified ongoing schemes in line with constitutional and legal requirements.
The dissolution of Pak-PWD last year was part of a broader federal restructuring drive to rationalize expenditures under fiscal consolidation commitments. The Ministry of Finance has emphasized tighter control over development spending as Pakistan works to contain its budget deficit and meet reform benchmarks linked to multilateral financing arrangements.
The committee also reviewed a summary from the Petroleum Division regarding a fact-finding report on a Deed of Settlement with Cnergyico PK Limited. The report, submitted in compliance with earlier ECC directions on delayed payment of Petroleum Levy, was returned with observations. The committee directed that a more comprehensive presentation be made at a subsequent meeting.
Petroleum Levy collections remain a key non-tax revenue source for the federal government. According to budget documents, levy receipts have contributed significantly to revenue targets amid efforts to broaden the tax base. Any delays in remittances can affect monthly fiscal projections and cash flow planning.
Monday’s decisions reflect the government’s continued focus on inventory management, fiscal discipline and revenue protection. Market participants will watch the wheat auction outcome closely, as pricing trends may influence flour rates and inflation expectations in coming months. The next ECC meeting is expected to revisit the petroleum settlement issue and assess progress on the approved wheat disposal plan.
