ECC decides to raise gas prices

ISLAMABAD: The meeting of the Economic Coordination Committee (ECC) of the Cabinet has decided to revise upward the gas prices for domestic as well as commercial and other categories of consumers.

The meeting of the ECC presided over by Finance Minister Miftah Ismail, Thursday, was submitted a summary by the Petroleum Division on the natural gas sale pricing for the fiscal year 2022-23. The ministry contended that since the fiscal year 2015-16, the gas prices were not revised in line with revenue requirements determined by the OGRA. This resulted in an accumulation of revenue shortfall/tariff differential amounting to Rs547 billion as of March 2022.

Similarly, the gas sector circular debt remained at Rs299 billion in June 2018, increased to Rs1,232 billion on 31st March 2022. To overcome revenue losses, contain gas sector circular debt, to sustain the supply chain, and invest in exploration and production, the Petroleum Division placed broad principles/parameters for revision of the category–wise consumer gas sale prices.

The ECC approved the proposed revision in consumer gas sale prices with the direction to further reduce the gas rates for export and non-export industry/captive power.

The Ministry of Industries and Production submitted a summary on the continuation of the PM’s relief package, 2020, Sasta Atta initiative for the KPK, and expansion of the Utility Stores network across Pakistan.

Gas tariffs now under govt focus

The ECC approved the continuity of distribution of subsidized Atta under Prime Minister’s Sasta Atta Initiative on 1,200 additional sale points in the KPK for the two months from 1st July to 31st August 2022 with further directions to submit in the next meeting of the ECC complete mechanism on the distribution of subsidy packages through the USC.

The Ministry of Industries and Production submitted another summary on the provision of funds to the HEC to release markup amount. The ECC allowed funds in the form of grant amounting to Rs96.873 million already released as loan to the HEC in pursuance of the ECC’s decision dated 22nd November 2021.

The ECC also approved funds amounting to Rs20.085 million in the form of grant and allowed its allocation through a technical supplementary grant to the Ministry of Industries and Production.

The funds have already been approved by the ECC in its decision dated 30th March 2022.

Further, the ECC directed the Privatization Commission that in future, all liabilities may be mentioned in contracts between buyer and seller of privatised entities.

The Ministry of National Food Security and Research submitted a summary on an urgent advice relating to the award of the second international wheat tender 2022 opened on 1st July 2022 for 500,000 MT. The ECC, after discussion, scrapped the tenders and directed the TCP to float fresh tender for the import of 300,000 MT of wheat.

Further, a committee has been formed on the directions of the prime minister comprising ministers of Commerce, National Food Security and Research, and Finance to ascertain the actual wheat requirement for the country.

On a summary of the Power Division, the ECC granted approval for issuance of the GOP sovereign guarantee of Rs10 billion for the construction of two units of 660 MW Super Coal Power Projects, Jamshoro, that is 90 per cent compete, in favour of local banks/financial institutions under Syndicated Term Finance Facility (STFF) agreed with M/s Faysal Bank Limited.

Copyright Business Recorder, 2022