ECC raises sovereign guarantee ceiling for PSO by Rs100bn

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has given its approval to extend the sovereign guarantee in favour of Pakistan State Oil (PSO), to Rs 100 billion.

The Federal Minister for Finance, Revenue, and Economic Affairs, Dr. Shamshad Akhtar presided over a meeting of the ECC of the Cabinet, on Friday.

The ECC discussed and approved a summary submitted by the Ministry of Energy, for the extension of GOP guarantee ceiling of Rs 100 billion in favour of PSO till December 2024, subject to approval of terms and conditions of each financing facility by the Finance Division upon renewal.

Earlier, ECC in March 2023 allowed sovereign guarantees for Rs 50 bn to improve liquidity requirements and to avoid possible default in international payment obligations.

It is important to note here that sovereign guarantees aren’t paid out upon approval. Rather it means that, if PSO fails to abide by any of its debt obligations, the government of Pakistan guarantees an amount of Rs 100 billion (instead of Rs 50 billion, as set previously).

The ECC also took up a summary submitted by the Ministry of Energy regarding “Uniform Quarterly Tariff Adjustments for K-Electric Consumers at par with XWDISCOs 2nd & 3rd Quarterly FY 2023”. After detailed discussion, it was decided by the ECC that the tariff rationalisation by way of adjustments for K-Electric in line with the uniform QTA application guidelines already issued to NEPRA, shall be applicable on the consumption of July, August, and September 2023, and should be recovered from consumers of K-Electric in December 2023, January 2024, and February 2024, respectively.

Moreover, application of XWDISCOs’2nd quarterly tariff adjustment (QTA) of Rs. 0.4689/unit, already approved for K-Electric consumers, in line with the uniform QTA application guidelines already issued to NEPRA, shall be applicable on the consumption of April, May, and June 2023 to be recovered from consumers of K-Electric in December 2023, January 2024, and February 2024, respectively.  

The ECC also discussed the summary submitted by the Ministry of Maritime Affairs regarding the “Revision of Lighthouse Dues”. The ECC, after detailed discussion, decided to revise the Lighthouse dues from Rs. 7/ NRT (Net Register Tonnage) to Rs. 20/NRT, under Section 10(1) of the Lighthouse Act, 1927.

Another summary submitted by the Ministry of Poverty Alleviation & Social Safety regarding the “Grant of Special Relief Package for Daily Wage Workers on Chaman Border” was also considered. After detailed discussion and deliberation, the ECC asked BISP to examine the cases of 8,000 registered daily wage workers employed at the Chaman border to see whether they were already in its system. BISP was directed to provide support to the eligible ones from its allocated budget in consultation with the Finance Department, Government of Balochistan, who will later reimburse the amount spent on the provision of six-months’ support to the daily wage workers.

A proposal for disbursement of Rs 20 billion credited to the Federal Government Account by the Finance Department Government of Punjab for further disbursement to Green Cooperative Initiative (Pvt) for Green Pakistan Initiative was also discussed. The ECC approved the disbursement with the observation that the provincial governments may directly engage with companies operating under Green Pakistan Initiative for future disbursements.  

The summary submitted by the Ministry of Interior regarding Technical Supplementary Grant amounting to Rs. 47.45 million within the sanctioned budget, for repair and maintenance, during CFY 2023-24, was considered and approved.

ECC also considered a summary submitted by the Ministry of Information Technology & Telecommunication, and approved release of Rs 5 billion as bridge finance from the R&D Fund for the Digital Information Infrastructure project.

Shahzad Paracha
Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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