By Staff Reporter
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday consented to a hike of Rs7.91/unit in the baseline power tariff on average, but in a staggered manner, starting from July 1, 2022.
This tariff will be implemented in three phases and the first hike will be implemented from July 1, 2022.
The Ministry of Power tabled a summary before the ECC and proposed two options in line with the NEPRA-determined tariff to place a uniform tariff.
Under option-1, it is proposed to pass on Rs7.91 per unit on the national average basis to the consumers with the effect from July 1, 2022. This will result in a targeted tariff differential subsidy of Rs 184 billion.
Under option-2, it is proposed to pass on Rs6.25 per unit increase to consumers with effect from July 1, 2022 and remaining Rs1.66 per unit from October 1, 2022.
This option will result in increased tariff differential subsidy to the tune of Rs231 billion. For KE, the same proposals were tabled before the ECC.
However, the ECC approved passing on the baseline tariff and decided to implement it in three phases so the Ministry of Power was directed to work out exactly.
According to an official announcement made after the ECC meeting, the Ministry of Energy, Power Division, submitted a summary on tariff rationalisation for the power sector. The ECC, after detailed discussion, approved the annual rebasing plan with certain modifications.
The ECC also directed the Power Division to recommend subsidy reform adjustment for unprotected consumers, which was approved in December 2021 but not implemented.
Another important summary for the establishment of a Revolving Fund for repayment of CPEC-related Chinese power companies was deferred.
Federal Minister for Finance and Revenue Miftah Ismail presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet at the Finance Division on Monday.
The Ministry of Industries and Production submitted a summary for extension of Prime Minister’s Relief Package-2020 and fixation of Ghee prices at Utility Stores Corporation.
The ECC approved an extension in the Prime Minister’s Relief Package-2020 up to 30th June, 2022 on all five essential items and allowed that Ghee shall be sold on all USC outlets throughout the country @ Rs300/kg from 9th June, 2022 irrespective of the higher market prices. The ECC further approved the allocation of Rs3,447.60 million in favour of USC through a Supplementary Grant.
The Ministry of Aviation submitted a summary for the payment of Sales Tax for leased aircrafts on installments basis. The meeting was informed that Pakistan International Airline Corporation Limited (PIACL) was going to induct four (04) A320 Aircrafts on dry lease for a period of 72 months. Due to financial constraints, PIACL is not in a position to pay GST on the total rental value in a lump sum. The ECC after considering incoming Haj 2022 and financial constraints of PIACL approved the payment of GST @ 17 percent i.e., Rs1.596 billion approximately on total rental value of Rs9.388 billion of four (04) A320 leased aircrafts on monthly instalments over the lease term starting from the date of arrival of aircrafts, including 01 already arrived.
The Ministry of Communications presented a summary on the requirement of additional funds for construction of Gilgit-Shandoor road, N-140. Rs2,000 million was allocated in the Federal Budget 2021-22, whereas the actual requirement of funds to acquire land and make payments of certified liabilities is Rs6,000 million. The ECC accorded approval to Rs4,000 million as additional funds for the “Construction of Gilgit- Shandoor Road, N-140.”
The Petroleum Division submitted a summary for enhancement of oil and gas production from TAL blocks vis-a-vis provisional allocation of gas price. Keeping in view the shortage of gas in the country, the ECC conditionally allowed M/s MOL to commence production from Tal block namely Mamikhel South. The TAL JV was given the 2012 Policy Price on a provisional basis until further decision of the government.
The ECC also approved a revised Ex-officio Steering Committee of the Targeted Commodity Subsidy Program (TCSP) to oversee the implementation of the Commodity Subsidy Program with the Minister of Poverty Alleviation and Social Safety as chairperson.
The ECC approved supplementary/technical supplementary grants; Rs25.61 billion for the Petroleum Division for the disbursement of Price Differential Claims to OMCs/refineries for the first fortnight of June 2022 and additional requirements of the previous fortnight; Rs36 billion in favour of the Petroleum Division to maintain the sustainability of the LNG supply chain as well as import of petroleum products.
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