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March 27, 2020

ECC approves Rs26bln subsidy for KE consumers

Business

March 27, 2020

ISLAMABAD: Government on Thursday approved Rs26 billion in subsidy to help consumers of K-Electric sustain tariff adjustments and asked the officials to keep notification of revised-up tariffs on hold for three months amid coronavirus outbreak.

The Economic Coordination Committee (ECC) of the cabinet took the decision during a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh.

ECC approved quarterly adjustments of tariff of K-Electric limited for the period from July 2016 to March 2019. It directed the officials to notify the tariff after three months and asked the finance and power division to facilitate K-Electric by advance provision of subsidy amounting to Rs26 billion as a relief measure for the people of Karachi amidst coronavirus outbreak and in Ramazan. The meeting was told that the revision of tariff would have an impact of Rs1.09 to Rs2.89 / kilowatt-hour for various categories of consumers.

ECC further nodded various technical supplementary grants worth Rs10.8 billion, including Rs275 million in favour of ministry of housing and works for capital outlay on civil works, Rs84.3 million for displaced people of tribal areas, Rs5.5 billion for sustainable development goals achievement program and Rs5 billion to National Disaster Management Authority (NDMA) for fighting the spread of coronavirus.

The technical supplementary grant approved for NDMA would be utilised to gain logistic support and the provision of different types of personal protection equipment against the virus like respirators/face masks.

ECC formed an inter-ministerial committee to firm up proposals in a month’s time on incentive package for the national electric vehicle policy. The committee acknowledged the role and efforts made by ministry of climate change on preparing incentive proposals for national electric vehicle policy.

On the summary moved by the ministry of energy power division on execution of liquefied petroleum gas air mix supply projects by sui companies, ECC decided to continue the operation of two already installed and working plants in Awaran and Bella and approved the installation of another four plants in Gilgit, Drosh, Ayun and Chitral town where the equipment has already been procured for plant installation.

The work on other projects of the same nature was stalled as it required a huge amount of subsidy. The meeting was told that Sui Northern Gas Pipelines Limited (SNGPL) requires Rs19.851 billion per annum for operation of 16 projects and Sui Southern Gas Company (SSGC) would require Rs14.4 billion to operate 32 approved projects.

ECC asked the ministry of energy to engage with the government of Balochistan and decide upon more efficient projects, which would give the maximum benefit to the population of the province within the same amount of allocation/subsidy. The decision was taken in the context that the existing revenue shortfall of SNGPL was Rs143 billion and for SSGC Rs72 billion as of June-end last year (2018/19). The committee also decided to allocate five million cubic feet per day gas to SSGC. The price of gas would be determined according to the petroleum policy.