The decision was made in the ECC meeting presided over by the PM’s finance advisor Abdul Hafeez Shaikh, while other six points of the agenda were also discussed in the meeting.
The ECC has also approved supplementary grand of 80 million rupees and Rs 350 million grant for Pakistan Steel Mills to pay off the gas bill.
ECC has delayed the increasing gas prices for the next meeting while it has allowed SBP to sell its share to House Building Finance Company Limited (HBFC) on the recommendation of the finance ministry.
It is pertaining to be mention that a summary moved by the Petroleum Division to the ECC proposed 5-15pc increase in gas tariff for different consumer categories. The ECC had considered the summary on January 20 but put the matter on hold owing to the then prevailing controversy over wheat and sugar price hike.
The division in its summary said that under the Oil and Gas Regulatory Authority (OGRA) law, federal government is required to “advise category-wise gas sale prices to OGRA for notification in the official gazette within forty days i.e. Jan 20, 2020”.
It said the division has changed OGRA’s recommendations by reducing the proposed price increases for the poor and lower middle class.
The summary, however, proposed about 400pc increase in meter rent for domestic consumers from Rs20 per month to Rs80. The division said the meter rent was last fixed in 1997.
The summary proposed a 5pc increase in gas tariff for domestic consumers with lower consumption, 12pc increase for power sector plants and 15pc increase for industrial captive power plants and compressed natural gas stations (CNG).
The division said OGRA had determined revenue requirement of Rs274.2 billion for Sui Northern Gas Pipelines Limited (SNGPL) and Rs282.9bn for Sui Southern Gas Company Limited (SSGC) on Dec 11, 2019.
At existing gas prices, the two companies faced a cumulative loss of about Rs35bn. The division said that OGRA’s recommendations had been examined and revisions were made in various categories and heads to protect the revenue requirement determined by the regulator.
Meanwhile, the ECC considered and approved waiving all port dues/charges amounting to Rs 194,951,059 on 31-1-2020 or till the vessels leave the port accruing against Karkey, the Turkish power company.
The said waiver was required as a consequence of the settlement agreement reached between the Government of Pakistan and Karkey, the Finance Ministry said.
On the summary moved by the Ministry of Industries and Production for the payment of outstanding liabilities of Pakistan Steel Mills against Sui-Southern Gas Company for the non- payment of Gas bills, ECC approved the release of Rs.350 million for the partial settlement of the SSGC liability.
Establishment of Trust Fund to implement risk sharing facility under 3rd Tranche of US$10 million of credit line of US$140 million obtained from World Bank for Pakistan Mortgage Refinance Company Limited (PMRCL) was also approved. The purpose of the Trust will be to leverage the Trust Funds by issuing guarantees in favour of the mortgagors to cover possible losses from eligible mortgage loans.
The Finance Division also sought approval for the demand of Rs 80 million as technical supplementary grant in the budget of the Finance Division for the Financial Year 2019-20 for providing assistance for families of the government employees who expired during service and provision of ad-hoc relief allowance 2019.
The ECC also approved the proposal sent by the Ministry of Finance for the issuance of direction of the Federal Government to the State Bank of Pakistan under sub-section 6(A) of the section 17 of the SBP Act 1956 to sell its shares in House Building Finance Company Limited (HBFCL).
The ECC approved the grant of Technical Supplementary Grant amounting to Rs 100 million to National Information Technology Board (NITB) under the Ministry of IT & Telecommunication for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for the implementation of the E-governance program.
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