ECC Approves Rs. 29.72 Billion Cash Transfers For 3.72 Million Ehsaas Applicants

The Economic Coordination Committee (ECC) of the Cabinet has approved Rs. 29.72 billion to provide cash assistance of Rs. 12,000 per beneficiary to 3.725 million applicants irrespective of provincial, regional, and district quota under the Ehsas Emergency Cash Program.

Chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh, ECC allowed the BISP to spend Rs. 29.72 billion from its allocated budget of Rs. 200 billion for 2020-21 for providing cash transfers to 3.72 million applicants with the instruction that any additional requirement for regular operations of BISP would also be provided during 2020-21.

The decision came after the Poverty Alleviation and Social Safety Division revealed that 3.151 million applicants who had applied for assistance through the SMS, were found eligible under the approved criteria but these applicants could not be provided assistance on account of provincial/district quotas.

ECC was told that the Punjab government had already agreed to provide assistance to 700,000 of the applicants identified through SMS, leaving 2.451 million eligible applicants who could be provided cash assistance @ Rs. 12,000 (Rs. 3000 for four months) at a total cost of Rs 29.72 billion.

During the meeting, the ECC also took up a proposal for policy guidelines with respect to the sale price of RLNG. Given the ring-fenced nature of RLNG and indigenous gas pricing, the sale of RLNG to domestic gas consumers at weighted average domestic tariff/gas sale price on M/s SNGPL network had resulted in accumulative tariff differential/RLNG revenue shortfall of Rs. 73.84 billion for the period July-2018 to April 2020.

This revenue shortfall had occurred after adjustment of RLNG impact on a cost-neutral basis as per the policy whereby the SNGPL sold indigenous gas as RLNG to its consumers and recovered some of the revenue shortfalls whenever the surplus system gas became available.

The ECC was briefed that the issue of RLNG revenue shortfall had arisen mainly because of the price differential in domestic gas as 91 percent of the domestic gas consumers had been paying an average monthly bill of Rs. 121 which was many times less than the price of imported RLNG supplied to domestic consumers in the winter months.

The committee considered the proposal and asked the OGRA to review it, especially the RLNG revenue shortfall as worked out by the SNGPL, and report back to ECC. It also decided to further discuss the issue in a small group in order to develop a consensus-based solution to the issue for a policy decision at the government level to avoid creating a circular debt situation in the RLNG sector.

The ECC also took up and approved a proposal by the Ministry of Information Technology and Telecommunication for NTC’s Budget for the FY 2020-21 (Budget Estimate Revenue Rs. 4.59 billion, operating cost Rs. 4.38 billion and ADP Rs. 1.23 billion) and NTC Budget for FY 2019-20 (Revised Estimates Revenue Rs. 3.95 billion, operating cost Rs. 3.93 billion and ADP Rs 1.08 billion).

Additionally, the committee took up a proposal by the Ministry of Industries and Production that as per the data furnished by National Fertilizer Development Centre (NFDC), the national inventory for Urea fertilizer would be below the buffer stock level of 200,000 metric tonnes in the months of December 2020 to February 2021.

In order to cover this gap and maintain the buffer stocks at the required level, gas at a rate of Rs. 756 MMBTU be provided to two shutdown plants at SNGPL networks, namely Agritech and Fatima Fertilizer, for three months w.e.f. July-September. This would involve the GOP’s share at Rs. 959 million much less than the revenue spent previously on using these plants to produce the Urea fertilizer to cover up the shortage.

The ECC also discussed the issue of quarterly adjustments of K-Electric Limited for the period from July 2016 to March 2019 and affirmed its previous decision of 26th March 2020 whereby recommendations of a committee constituted by ECC in its meeting on 4th March 2020 to settle the issue of quarterly adjustments of the of K-Electric Limited for the period from July 2016 to March 2019 were approved with the instruction that the same would be effective after three months.