ECC defers fuel adjustments in electricity bills till June 2020

--Sets up a committee to weigh the impact of slowdown in economic activity on the power sector

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ECC meeting

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved the deferment of monthly and quarterly fuel adjustments in electricity bills till June 2020.

The ECC meeting, chaired by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, was informed that the deferment in fuel adjustments would have a total impact of Rs151 billion on the national exchequer.

In total, the committee approved four technical supplementary grants for the current financial year.

These included Rs160 million TSF for the Federal Public Service Commission, Rs1.7 billion TSF to achieve Sustainable Development Goals (SDGs) programme, Rs1.14 billion for Special Security Division (SSD- South) Phase-I, and Rs468.212 million for Special Communication Organization (SCO).

A proposal was moved by the Power Division seeking funding to the power sector from the economic relief package in order to mitigate the effect of shortfall in the recoveries due to reduced demand of energy and late recoveries amid COVID-19 outbreak.

On this, the ECC constituted a committee, comprising finance and power secretaries and Adviser to PM on Austerity and Institutional Reforms Dr Israt Hussain, to guage the impact of economic slowdown on the power sector and firm up the TORs that could assist in providing relief to the sector.

Meanwhile, the ECC approved the appointment of valuator for Pakistan Energy Sukuk phase-II (Rs200 billion) as the company had already done an extensive exercise of valuation of multiple government assets.

A Power Division request for a Syndicated Term Finance Facility of Rs100 billion was referred to finance secretary/PPRA chairman for facilitation on the matter.

Moreover, the ECC approved the appointment of SNGPL managing director a member of the Price Negotiation Committee for TAPI (Turkmenistan, Afghanistan, Pakistan, Iran) Gas Pipeline Project.

In order to cover up the losses incurred by Pakistan State Oil due to devaluation of Pakistani rupee, the ECC in principal agreed to a maximum of 60 days period for the adjustment of exchange gain or loss, w.e.f 1st March 2020, and directed the Power Division to resolve the issue in consultation with Finance Division.

On a proposal of the Ministry of Energy regarding liquidity requirements of Pakistan State Oil, which has huge outstanding receivables from different government sector organizations and is experiencing slow recoveries due to the ongoing pandemic, ECC directed the finance secretary to consult with Power Division and help in retirement of some of the PSO liabilities so as to run its business in this difficult situation.

Approving a proposal of the Ministry of Maritime Affairs, the ECC allowed KPT Board Resolution to extend existing free period from 5 working days to 15 working days for cargo/containers, with effect from 25 March till 30 April.

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