The Economic Co-ordination Committee (ECC) of the Cabinet on Thursday approved one-and-a-half-months salaries for the Pakistan Steel Mills employees. A meeting of the ECC chaired by Finance Minister Ishaq Dar was submitted a proposal by Privatisation Commission regarding the payment of salaries to the PSM employees. Privatisation Commission requested for approval of Rs 570 million for the payment of the 50 per cent remaining salary for August 2016 amounting to Rs 190 million and Rs 380 million for the month of Sep 2016.
The ECC also approved, in principle, the funding on expenditure of Inter State Gas Systems (Private) Limited (ISGSL) subject to completion of corporate formalities. The ministry of petroleum and natural resources proposed that the Government Holding (Private) Limited (GHPL), being the parent company, will give a three-year term loan to the ISGSL to fund all its expenditures on all government mandated projects being undertaken by ISGSL. This loan and related interest will be repayable after three years through a single bullet payment on terms separately agreed between GHPL and ISGSL through a loan agreement.
The ECC also approved revision of its earlier decision of November 17, 2016 on the proposal of the ministry of petroleum and natural resources. The decision was a reduction in gas sale price for industrial sector and captive power from Rs 600/MMBTU to Rs 400/MMBTU which was also applicable to fertilizer sector (only fuel stock) and general sales tax to be charged @ Rs 100 per MMBTU on the gas sale price for the aforesaid consumers.
As a consequence of this decision, the differential in cost of production of industrial customers on the SNGPL system vs SSGC customers has widened, which was agitated by the industrial consumers on SNGP system, who sought a level-playing field.
Therefore, the ministry of petroleum and natural resources requested the ECC for withdrawal of its earlier decision of November 17, 2016 and proposed a reduction in gas sale price for power stations and independent power producers from Rs 613/MMBTU to Rs 400/MMBTU, and general sales tax to be charged at Rs 100 per MMBTU on gas sale for the aforesaid consumers. The ministry stated that the revised decision in this context will not only result in elimination of price disparity to a large extent, but will also reduce electricity generation cost in the country, which will provide relief to electricity consumers across the board.