ECC approves removal of incremental block tariff in power sector subsidies

ISLAMABAD: The Economic Coordination Committee of the Cabinet on Thursday approved removal of one slab benefit (incremental block tariff) and incorporation of revised subsidy and inter-distribution companies tariff rationalization/cross-subsidies under Retargeting of Power Sector Subsidies Phase –II.

Omar Ayub Khan, minister for Economic Affairs chaired the ECC meeting.

According to the summary presented by Ministry of Energy a gradual reduction in total net subsidy for unprotected Residential consumers, reduction in cross-subsidy and removal of previous slab benefit were approved by the ECC.

Dividing agriculture tube-wells slab into two categories and reforming / gradually decreasing subsidies to QESCO tube-wells by subsidizing solarization/ modernization of tube-wells for agricultural consumers were also approved.

The ECC approved removal of one slab benefit (Incremental Block Tariff) and incorporation of revised subsidy and inter distribution companies tariff rationalization / cross subsidies. It also considered and approved reduction in subsidy would effectively increase non-protected residential non-ToU consumers rate by Rs0.53/unit

The ECC also recommended the summary tabled by finance division for enhancement of ways and means Limit of Khyber Pakhtunkhwa Government from Rs27.0 billion to Rs31.3 billion due to the impact of wage bill of erstwhile FATA.

The ECC also approved scrapping of the tenders floated by TCP in respect of import of sugar. “On the recommendation of Technical Advisory Sub-Committee, ECC also approved the summary tabled by ministry of Industries & Production on revised gas supply priority order to fertilizer sector,” a statement said.

“System gas supplies will be ensured to these plants during the current Rabi Session 2021-22 ensuring immediate availability of urea fertilizer and saving of foreign exchange in case of import of urea from abroad.”

The ECC also approved Textile and Apparel Policy 2020-25 with directions to incorporate inputs of FBR and finance division and meet the observations of power division.

After detailed discussion, ECC approved Auto Industry Development and Export Policy (AIDEP) 2021-26, with the directions that export targets given in the policy may be reviewed every year and updated accordingly and proposed tariff structure to be presented separately to the ECC.

ECC also approved technical supplementary grant for amount Rs2.651 billion in favour of ministry of Housing & Works for execution of development schemes in the province of Sindh and Balochistan under SAP. Another supplementary grant in favour of energy minister was approved for payment of first instalment (40percebr) to IPPS of 2002 under payment mechanism.

The ECC deferred minimum indicative price of tobacco crop 2022 with the directions that a committee may be formed to address the observations of stakeholders and present the proposal in the next meeting after detail revision.

Adviser to the PM on Finance & Revenue Shaukat Tarin, minister for Industries & Production Makhdum Khusro Bakhtyar, minister for Energy Hammad Azhar, minister for Railways Muhammad Azam Khan Swati, minister for Interior Sheikh Rashid Ahmed, minister for National Food Security & Research Syed Fakhar Imam, adviser to the PM on Commerce & Investment Abdul Razak Dawood , minister of State for Information & Broadcasting Farrukh Habib, governor SBP and other senior government officers also attended the meeting.