ECC orders release of Rs4.1bln subsidy against RLNG supply

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday directed the release of Rs4.1 billion subsidy against the supply of re-gasified liquified natural gas (RLNG) to export-oriented industry for March last year.

The power division submitted a summary regarding the release of subsidy for the supply of 100 percent RLNG to export-oriented industry for the month of March 2020.

The ECC approved the summary and decided to form a sub-committee consisting of Adviser to Prime Minister on Commerce, Special Assistant to Prime Minister on Power and other relevant stakeholders to review the power subsidies provided to export oriented sectors, with a direction to submit a holistic proposal before the ECC.

The decision was taken during a meeting presided over by Minister for Finance and Revenue InShaukat Tarin.

In September 2018, the ECC decided to supply gas to industrial units of five zero-rated sectors, including textile, including jute, carpets, leather, sports and surgical goods on bases of 50:50 for domestic gas and RLNG from 28:72 at the weighted average gas tariff of $6.5 per million metric British thermal unit. Since there is a differential in the sale price of RLNG and domestic gas therefore supply at this rate required subsidy. Later that month, the ECC decided that 100 percent RLNG should be provided to zero–rated industry for three months i.e. December to February, and a blend of system gas and RLNG of 50:50 should be provided to zero-rated industry for a period of nine months, from March to November.

The power division presented another summary before the committee regarding release of the first instalment of payment to the independent power producers. The ECC constituted a sub-committee chaired by the minister for finance, comprising ministers and secretaries from energy, petroleum and other concerned ministries for further deliberations. the sub-committee would present a firmed-up proposal before the next ECC for consideration and approval.

ECC further approved technical supplementary grants of Rs22.7 million for the law and justice division for meeting the shortfall of funds under various administrative and related heads, Rs10 million in favour of the ministry of human rights to fund the National Trust for the Disabled, Islamabad, Rs7.2 million in favour of ministry of housing and works for the execution of development schemes of the interior division, and Rs262 million in favour of ministry of housing and works for meeting various necessary expenses.