ECC approves up to 14pc hike in gas price for commercial consumers

Committee also okays Rs20 increase in meter rent for domestic consumers

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ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved up to 14pc increase in the sale price of natural gas for commercial consumers.

Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh chaired the ECC meeting at the Cabinet Division.

The Ministry of Petroleum had proposed a 3.9pc increase in sale price for commercial, 14.8pc for fertiliser feed, 4.4pc for fertilizer fuel and 3.9pc for cement. On the other hand, it had recommended a 5.4pc slash in sale prices for power, 5.8pc for CNG, 4.5pc for general industry, 12.3pc for captive, 5.6pc for process-textile (exports) and — 15.2 for captive power — textile (export).

After detailed deliberations on the subject, the ECC approved an increase in natural gas sale price for commercial consumers, excluding tandoors. The committee decided that the increase should not be more than one-third of the GIDC that was imposed till August 2020.

The committee also approved a Rs20 per-month increase in the meter rent for domestic consumers of both gas companies.

Sources said that the government will earn a revenue of around Rs42 billion from the increase in gas sale prices and meter rent.

Meanwhile, the ECC approved the Ministry of Industries and Production’s request for the Pakistan Steel Mills’ retrenchment plan, which is aligned with the legal framework of relevant labour laws.

The retrenchment plan has been prepared to reduce the financial burden on the government and a report on the same has been presented in the Supreme Court of Pakistan. As the process is long one, the ECC was requested to start the implementation of retrenchment plan on immediate basis by allocating Rs19.65 billion to initiate the process in the light of the report submitted by PSM in the SC.

Another summary about PSM was brought to the ECC in which the forum was informed that the Supreme Court has directed that an amount of Rs11.680 billion may be deposited with the SC to pay off the liabilities of the non-litigants who have retired from PSM till 18th May 2020. The ECC, in an earlier meeting, had asked the Ministry of Industries and Production to submit the list of non-litigants and their dues. It was briefed to the ECC that there were 3,978 retired employees who are non-litigant.

Moreover, the ECC approved the Ministry of Commerce’s request to reduce the commission margin of the Trade Corporation of Pakistan on the import of wheat and sugar from the existing 2pc to 0.75pc.

Earlier in the meeting, the ECC chairman had stressed the need to ensure the availability of wheat and directed the officials concerned to update on the issue as the starter in every ECC meeting. He also expressed concern over the different numbers that “keep on coming up from different quarters regarding availability gap of the commodity”.

The adviser directed that the Ministry of Food Security after consultation with all the relevant stakeholders should inform the public on the matter with figures on the stock available and being brought into the country from different government and private sector channels to meet any future demand supply gap.

For the management and maintenance of Gurdwara Darbar Sahib in Kartarpur, the ECC allowed the establishment of a Project Management Unit (PMU), with the creation of 126 posts, to make the unit a self-financing body under the administrative control of the Evacuee Trust Property Board (ETPB).

It also allowed (in principle) the conversion of National Highway Authority loans into government grants on the presentation of an operational and corporatization plan for NHA. Planning Minister Asad Umar has been tasked to oversee the preparation of this plan.

On the request of the Ministry of Energy, the committee okayed the allowance of gas/RLNG supply to the industrial sector (exporters of five zero-rated sectors namely textile, carpets, leather, sports and surgical goods). In order to avoid curtailment of gas to these industries, which are heavily reliant on gas, supply of LNG will be made available to the industrial sector to ease up pressure on the SSGC system.

Starting from October 2020, gas supplies would be reduced to 50pc for both Saturdays and Sundays to the export sector for two consecutive weekends and possibly the third weekend, in order to build sustainable gas pressures in SSGC’s system. Once this is done, there will be no curtailment on Sundays.

The weighted average tariff will be charged at Rs930/MMBTU till February 2021. From March 2021, onwards notified domestic tariff would be charged unless an alternate mechanism is devised and approved by that time.

Lastly, the ECC decided to rationalize the tariff of the power sector-FCA and quarterly adjustments which were due for the period from November 2019 to June 2020. According to the decision, there would have been a price increase in tariff to the tune of Rs1.62/kWh but the forum decided to add subsidy to the price for the end consumers that comes to about Rs1.30/kWh. So the net increase that will be passed on to the consumers of electricity up to 200 units will only be 32 paisas.

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