ECC defers decision on raising gas tariffs
Last updated on: 04 February,2020 02:19 pm
The proposal has sought to raise the prices with effect from Feb. 1, 2020.
ISLAMABAD (Dunya News) – The Economic Coordination Committee (ECC) of the cabinet on Tuesday once again postponed taking a decision on raising gas tariffs by up to 214 percent for certain consumer categories.
Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh presided over a meeting to review a summary “natural gas sales pricing FY2019-20 with effect from Feb 1, 2020” moved by the petroleum division but the matter has been deferred.
However, the committee approved the technical supplementary grant for the ministry of defense and the establishment of a “digital media wing” in the ministry of information.
Besides, another important condition of the Financial Action Task Force (FATF) has been completed by the ECC as it decided to make Pakistan Postal Insurance a “company” and a paid-up capital of 700 million has been approved for the postal insurance.
The Oil and Gas Regulatory Authority (Ogra) had proposed the hike in gas tariffs, but the ECC had in the last meeting postponed the matter upon Prime Minister Imran Khan’s intervention when wheat crisis intensified across the country last month and under extreme winter conditions which pushed high consumption of gas.
The summary has also sought increases in gas tariffs by 214pc for the Sui Southern Gas Company (SSGC) and 192pc for the Sui Northern Gas Pipelines Limited (SNGPL). A significant increase from Rs20 to Rs80 as meter rent for domestic consumers has also been proposed.
It has also proposed a rise of up to 245pc for commercial consumers and 153pc for fertiliser sector.
Furthermore, it has proposed a 31 percent increase in gas tariff for captive power plants that would have serious implications on the productivity of leading export oriented sectors, and the CNG sector.
The proposal has sought to raise the prices with effect from Feb. 1, 2020. The regulatory authority had on Dec. 11 last year decided to increase the gas tariffs.
The proposed adjustments in gas rates are aimed at securing Rs35bn in additional revenue to two gas companies whose revenue requirements have been determined by the regulator at Rs274.2bn for SNGPL and Rs282.9bn for SSGCL.
The meeting comes as the two-week discussions between Pakistan and a staff mission of the International Monetary Fund (IMF) commences in Islamabad before the international moneylender approves release of the third trench of about $450 million under the $6 billion Extended Fund Facility (EFF) finalised in May last year.