ISLAMABAD: The government on Monday approved Rs303 billion worth of a supplementary budget to cover the financing cost of a series of populist measures – Rs5 per unit cut in electricity rates, partial payments to the oil industry for a price freeze on petroleum products and debt servicing of Naya Pakistan Certificates.
The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet which also approved Rs8.28bn subsidy for 19 kitchen items for Ramazan Relief Package and Rs3bn for intending overseas Pakistanis to benefit from the flagship Kamyab Pakistan Programme.
The meeting was presided over by Finance Minister Shaukat Tarin and attended by only three out of 12 other members of the ECC.
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The major supplementary grants included Rs136bn for Rs5 per unit reduction in electricity rates and Rs20bn first-month installment of price differential claims to the oil industry announced by Prime Minister Imran Khan last week. Besides, Rs135.078bn was approved for expensive debt servicing of Naya Pakistan Certificates and Islamic Naya Pakistan Certificates. These certificates, part of Roshan Pakistan Account, entail up to 7pc return in dollar terms or 11pc in rupee.
The ECC approved Rs5 per unit reduction in electricity base rate for the relief period of four months (March to June)”, said an official statement. The relief package will be applicable to all commercial and domestic non-ToU consumers having monthly consumption up to 700 units, excluding lifeline consumers. The cash flow requirement for this package is Rs136bn, it added.
The summary seen by Dawn showed the government will cap monthly fuel cost adjustment (FCA) at Rs3.10 which is currently applicable on all consumers on account of December 2021 consumption. For January consumption, the National Electric Power Regulatory Authority (Nepra) has already finalised Rs5.95 per unit that would remain unimplemented as the Rs3.10 FCA already in place would continue to be charged to consumers while the remaining Rs2.85 per unit would be paid out of budget as subsidy.
The meeting also approved a summary of the Ministry of Energy for reimbursement of Price Differential Claims (PDCs) of oil marketing companies (OMCs) and refineries, in line with PM relief package of reduction in the consumer prices of petrol and diesel by Rs10 per litre and capping it at this level for four months.
The price differential would be paid to the OMCs and refineries by the government as a subsidy to avert any shortage in the market. The ECC approved a special disbursement mechanism to pay the PDC within 15 days, opening of special assignment account with PSO and an initial amount of Rs20bn to PSO in accordance with the mechanism.
The ECC also approved Kamyab Overseas Programme (KOP) as a new component of Kamyab Pakistan Programme. The new initiative is meant for prospective low-income overseas workers having confirmed foreign job offer, employment agreements and valid travel documents and registered with NSER to avail interest-free loans under KPP. The maximum amount of loan would be Rs300,000 and repayable after three months of departure.
The loan will be provided to 10,180 beneficiaries with estimated required funds of Rs3bn for Q4FY22.
The ECC also approved proposed amendments in the import and export policy order 2020 for the development of Integrated Tariff Management System for PSW.
It also approved an allocation of 16mfcd of gas from Togh Field to SNGPL.
The ECC approved to amend the respective Petroleum Concession Agreements by allowing GHPL to increase its working interest above its statutory share of 2.5pc being state participator in Wali, Jandran West, Saruna and Pesu blocks of OGDCL.
