ECC enhances subsidy on sugar by Rs2

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved the proposals to enhance Rs2 per kilo subsidy on sugar and to import 150,000 tons of urea.
Through a proposal, the Ministry of Industries and Production requested an increase in subsidy on sugar during the month of Ramazan facilitating the Utility Stores Corporation (USC) to sell sugar to customers at an economical price. The ECC approved increase in amount of subsidy on sugar from Rs3 to Rs5 per kg. This step would add around another Rs100 million to the amount of subsidy.
The ECC approved the proposal moved by the Ministry of Industries and Production for the import of additional 150,000 tons of urea fertilizer for the Kharif season. It may be recalled that the ECC in its meeting on April 23 had allowed import of 0.1 million tons of urea. Additional import has been allowed with a view to bridging the demand and supply gap and building up sufficient buffer stock. The ECC consolidated four different surcharges on electricity for the new determination of the tariff for the ongoing month (May) which would not have any impact on rates of electricity.
“Yes, the ECC has only consolidated the existing surcharges which will not have any impact on power tariff,” Federal Minister for Finance Ishaq Dar explained to The News on Thursday evening when he was approached to comment on the impact of the ECC decision on power tariff.
Earlier, the sources said that the ECC approved a summary forwarded by Ministry of Water and Power for consolidating the four surcharges: equalisation surcharge, tariff rationalisation surcharge, debt servicing surcharge and Neelum-Jhelum Surcharge. The ECC, they said, only regularised these surcharges for determination of upcoming tariff by National Electric Power Regulatory Authority (Nepra).
According to a statement issued by Ministry of Water and Power, the ECC considered the proposal submitted by it on tariff and subsidy rationalisation and approved the current electricity notified average consumer tariff rate along with its components and surcharges.
Accordingly, no new surcharge will be imposed on the electricity consumers and the average national tariff will be maintained at current level. These tariffs are closer to the tariffs determined by Nepra.
The government will continue to apply uniform tariff across the country and subsidise the domestic consumers up to 300 units and agriculture consumers, and continue to pass on the full cost of service as determined by Nepra.
The tariffs as determined by Nepra are still higher and domestic (up to 300 units) and agricultural consumers are still protected through provision of subsidy by the government.
Similarly, the ECC also considered proposal that full benefit of all negative adjustments on account of monthly FCA (Fuel Cost Adjustment) would be passed on to all consumers except those who had subsidised and special electricity tariff. This would ensure that the cost of reduction benefits would be passed on to the consumers who are paying higher cost of electricity.
However, according to the announcement of Finance Ministry, Federal Minister for Finance Senator Muhammad Ishaq Dar chaired the meeting of the ECC of the Cabinet at the PM Office on Thursday for approving important proposals.
The ECC also considered the proposal submitted by Ministry of Water and Power to further empower the provinces in setting up renewable energy projects. An enabling provision in the renewable energy policy has been incorporated. The provision will allow the provinces to facilitate sponsors of renewable projects and enter into tripartite arrangements where the federal government will provide sovereign guarantee to the provincial projects on renewable energy.