ISLAMABAD: The government on Monday approved a supplementary budget worth 303 billion rupees to cover the cost of financing a series of populist measures – reduction of 5 rupees per unit in electricity tariffs, partial payments to the oil industry for a freeze in the prices of petroleum products and servicing the debt of the Naya Pakistan certificates.
The decisions were taken at a meeting of the Cabinet’s Economic Coordination Committee (ECC) which also approved a grant of Rs 8.28 billion for 19 kitchen items for the Ramazan relief program and Rs 3 billion for overseas Pakistanis to benefit from the flagship Kamyab Pakistan programme.
The meeting was chaired by Finance Minister Shaukat Tarin and featured only three of the other 12 ECC members.
The main additional grants included Rs136bn for Rs5 per unit electricity tariff reduction and Rs20bn for the first month of differential price claims to the oil industry announced by Prime Minister Imran Khan last week. In addition, Rs 135.078 billion has been approved for onerous debt servicing of Naya Pakistan Certificates and Islamic Naya Pakistan Certificates. These certificates, which are part of the Roshan Pakistan account, entail up to 7% return in dollars or 11% in rupees.
Gives green light for Rs8.2bn Ramazan package
The ECC has approved a reduction of Rs 5 per unit in the basic electricity tariff for the four-month relief period (March to June),” an official statement read. The relief package will be applicable to all non-ToU commercial and domestic consumers with monthly consumption up to 700 units, excluding lifeline consumers. The cash requirement for this package is Rs 136 billion, he added.
The summary seen by Dawn showed that the government would cap the monthly Fuel Cost Adjustment (FCA) at Rs3.10, which is currently applicable to all consumers due to December 2021 consumption. For January consumption , the National Electric Power Regulatory Authority (Nepra) has already finalized Rs5.95 per unit which would not be implemented as the Rs3.10 FCA already in place would continue to be charged to consumers while the remaining Rs 2.85 per unit would be taken from the budget as a subsidy.
The meeting also approved a Department of Energy summary for reimbursement of Price Differential Requests (PDCs) from Petroleum Marketing Companies (OMCs) and refineries under the PM Relief Program to reduce prices to consumption of petrol and diesel from 10 rupees per litre. and capped at this level for four months.
The price differential would be paid to OMCs and refineries by the government as a subsidy to avoid any shortage in the market. The ECC approved a special disbursement mechanism to pay the PDC within 15 days, the opening of a trust account with PSO and an initial amount of Rs 20 billion to PSO in accordance with the mechanism.
The ECC has also approved the Kamyab Overseas (KOP) program as a new component of the Kamyab Pakistan program. The new initiative is aimed at prospective low-income foreign workers who have confirmed a job offer abroad, valid employment contracts and travel documents and registered with the NSER to qualify for interest-free loans under the KPP . The maximum amount of the loan would be Rs300,000 and repayable after three months of departure.
The loan will be extended to 10,180 beneficiaries with required funds estimated at Rs 3 billion for Q4FY22.
The ECC has also approved proposed changes in the Import and Export Policy Ordinance 2020 for the development of an integrated tariff management system for PSWs.
It also approved an allocation of 16mfcd of gas from Togh Field to SNGPL.
The ECC approved the modification of the respective oil concession agreements by allowing GHPL to increase its working interest above its statutory 2.5% share as a state participant in the Wali, Jandran West Blocks , Saruna and Pesu from OGDCL.
Posted in Dawn, March 8, 2022