The Economic Coordination Committee (ECC) of the Cabinet has approved a 124% increase in gas prices on the direction of the International Monetary Fund (IMF).
Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet, today.
The Petroleum division informed the ECC to revise gas prices for residential and other categories of consumers which would generate a revenue of Rs. 310 billion as against apportioned Revised Estimated Revenue Requirements (RERR) for the six months (January to June 2023) of Rs. 305 billion.
The gas price for protective domestic consumers Up to 0.25hm3 would be Rs. 121 Rs MMBTU, Rs. 150 up to 0.5 hm3, Rs. 200 up to 0.6 hm3 and Rs. 250 up to 0.9 hm3.
Meanwhile, the gas price for non-protective domestic consumers would be Rs. 400 from Rs. 300 upto 1hm3, Rs. 600 from Rs. 500 upto 1.5 hm3, Rs. 800 from Rs. 553 upto 2 hm3, Rs. 1100 from Rs. 738 upto 3 hm3, Rs. 2000 from Rs1. 107 up to 4 hm3 and Rs. 3100 from Rs. 1460 above 4 hm3.
Sources told ProPakkistani that proposed sales prices for commercial consumers would be Rs. 121 up to0.5 hm3, Rs. 350 from Rs. 300 Up to 1hm3, Rs. 730 from Rs. 553 up to 2hm3, Rs. 1250 from Rs. 738 up to 3hm3, Rs. 2250 from Rs. 1107 up to 4 hm3 and Rs. 3270 from Rs. 1460 above 4 hm3.
Similarly, the government has also increased gas prices for the commercial user by 29% to Rs. 1650/mmbtu, for exporters by 34% to Rs. 1100/mmbtu, for general industries up to 13.9% to Rs l1200/mmbtu, for CNG up by 32% to Rs. 1805/mmbtu and for cement companies up by 15% to Rs 1500/mmbtu.
OGRA issued its determination of Estimated Revenue Requirements (ERR) for FY 2022-23 on 03.06.2022 for both SNGPL and SSGC. According to the said determination, SNGPL required a revenue of Rs.261 billion and SSGCL required a revenue of Rs.285 billion in FY 2022-23.
OGRA did not allow previous years’ revenue shortfalls in the ERR of both gas companies. Pursuant to Section 8(3) of the OGRA Ordinance 2002, Government was required to advise OGRA to revise the consumer gas prices in accordance with Government policy with effect from 1st July 2022 within 40 days of the determination of OGRA.
However, the revision in consumer gas prices could not be done as of date. Due to price inaction, the Sui companies have already carried the revenue shortfall for the past six months i.e., July to December 2022.
G-20 Debt Service Suspension Initiative (DSSI)
The Ministry of Economic Affairs presented a summary of the G-20 Debt Service Suspension Initiative (DSSI).
This debt relief was announced in April 2020 for IDA-eligible countries to mitigate the socioeconomic impact of Covid-19. Under this initiative debt relief was extended through the suspension of principal and interest payments. So far, 37 debt rescheduling agreements with 15 creditor countries have been signed.
Foregoing in view, the ECC allowed the Ministry of Economic Affairs to sign a debt rescheduling agreement with Russia for debt suspension of a Covid-related amount US$ 14.53 million.
The Ministry of Poverty Alleviation and Social Safety presented a summary on the enhancement of the BSIP budget. The meeting was briefed on the on-going BISP programmes including Unconditional Cash Transfer (UCT) Programme “Benazir Kafaalat” covering around 9 million families, two Conditional Cash Transfer (CCT) programmes namely Benazir Taleemi Wazaif and Benazir Nashonuma.
Besides, This disbursement of cash assistance to affectees of floods as emergency relief of Rs. 25,000/- was provided per affected family to around 2.7 million families. In the Conditional Cash Transfer Programme, there have been accelerated enrolments in Benazir Taleemi Wazaif and it is anticipated that additional 1 million children will be enrolled by the end of June 2023.
Also, BISP has extended CCT Benazir Nashonuma to all the districts of the country. The ECC after discussion granted Rs. 40 billion as Technical Supplementary Grant to BISP to meet its budgetary requirements for an increase in the unconditional and conditional grants.
Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Mr. Khurram Dastgir Khan, Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, Mr. Shahid Khaqan Abbasi MNA/Ex-PM, SAPM on Finance Mr. Tariq Bajwa, Federal Secretaries and other senior officers attended the meeting in person while Federal Minister for Industries and Production Syed Murtaza Mahmud, Minister of State for Petroleum Mr. Musadik Masood Malik and Governor SBP attended the meeting virtually through video link.
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