ECC Delays Decision on Recovering Rs100bn from Gas Consumers


The Economic Coordination Committee (ECC) of the Cabinet, chaired by caretaker Finance Minister Dr. Shamshad Akhtar, faced a deadlock in determining how to retrieve an additional Rs100 billion from gas consumers over the remaining months of the fiscal year. This decision was made during a meeting where an already allocated subsidy package of Rs7.5 billion for the upcoming Ramazan was approved.

The ECC deliberated on a Petroleum Division’s summary proposing an increase in gas rates ranging from Rs70 to Rs300 per unit (mmBtu) for various consumer categories, including residential users. However, caretaker Commerce Minister Gohar Ejaz emphasized the need to alleviate the burden of cross-subsidization on the industrial sector and advocated for the continuation of gas supply to certain Captive Power Plants (CPPs). This stance sparked debates regarding the impact of subsidy reduction on industries and other consumers, leading to a postponement of the decision.

In compliance with commitments made to the International Monetary Fund (IMF), the ECC is expected to reconvene, likely on Wednesday, for further discussions and data analysis on gas pricing. The IMF has been urging for a cessation of gas supply to CPPs to discourage consumption by less efficient sectors.

Meanwhile, earlier this month, the gas regulator proposed a 9% to 35% increase in gas rates for Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL), aiming to generate an additional Rs100 billion from consumers over the next four months.

Additionally, the ECC sanctioned the Ramazan Relief Package 2024, allocating Rs7.493 billion for beneficiaries of the Benazir Income Support Programme (BISP).

Moreover, responding to the commerce minister’s request, the ECC approved a scheme permitting the import of wheat for re-export of value-added wheat products, aiming to enhance opportunities for value-added exports.

Other approvals included tariff rationalization proposals from various sectors, commissioning of a 1,263MW combined cycle power plant, and a supplementary grant of Rs6 billion for sharing the subsidy on imported urea.

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