ISLAMABAD:
On Friday, the provisional government granted sovereign guarantees of Rs100 billion in favour of Pakistan State Oil (PSO) to help the business escape bankruptcy and authorised K-Electric (KE) to recover a Rs1.72 per unit spike in electricity bills from its customers.
The cabinet’s Economic Coordination Committee (ECC) made the decisions, and they once again couldn’t agree on raising petrol costs for fertiliser plants after eliminating subsidies.
The ECC agreed to prolong discounted petrol deliveries through the month of December. However, without a report from the relevant ministry, it did not formally implement the decision.
According to a statement released by the Ministry of Finance, the ECC gave final approval to a summary provided by the Ministry of Energy to extend the government’s guarantee ceiling of Rs100 billion in favour of PSO till December 2024. It was also stated that the renewal was contingent to the Finance Department’s acceptance of the terms and conditions of each funding instrument.
Due to the cyclical debt in the gas and power sectors, PSO is experiencing a severe liquidity difficulty as its receivables have accumulated to Rs755 billion. Nonpayment is a common cause of default for the company.
The ECC granted a proposal by the government of Punjab, which itself is running a deficit, to give a Rs20 billion interest-free loan to a business entitled Green Corporate Initiative (Private) Limited. The identity of the company’s owners was not disclosed.
The federal government account was credited with Rs20 billion by the Finance Department, Government of Punjab, and the ministry of finance said that “a proposal for disbursement of Rs20 billion credited to the federal government account was also discussed for further disbursement to Green Corporative Initiative Ltd for the Green Pakistan Initiative.” In addition, the ECC noted that in the future, the province government might work with Green Pakistan Initiative enterprises without going via the ECC.
The ECC also considered a summary on uniform quarterly tariff adjustments (QTA) for KE that was provided by the Ministry of Energy. An increase of Rs1.72 per unit was authorised for KE customers.
In accordance with the uniform QTA application guidelines already issued to the National Electric Power Regulatory Authority (Nepra), it was decided that the Rs1.25 per unit tariff rationalisation for KE would apply to consumption in July, August, and September 2023, and would be recovered from consumers in December 2023, January 2024, and February 2024.
In addition, the uniform QTA application rules state that a 47 paisa per unit increase, already approved for KE users, should be applied to consumption in April, May, and June 2023, with the resulting costs being recovered from KE consumers in December 2023, January 2024, and February 2024.
The ECC agreed to fund a monthly stipend of Rs20,000 for 8,000 border workers in Chaman at the expense of the provincial government.
According to the finance ministry, the province of Balochistan requested that the Benazir Income Support Programme (BISP) verify the eligibility of 8,000 registered daily-wage workers employed at the Chaman border, and provide support to the eligible ones from its allocated budget in consultation with the Finance Department, Government of Balochistan, for later reimbursement of the amount to be spent on providing six months of support to the daily-wage workers.
The approved budget for repairs and maintenance includes Rs47.45 million, which was requested by the Ministry of the Interior in its budget proposal. The Pakistan Rangers Sindh, which would get this funding, would utilise it to fix their helicopters.
The ECC also reviewed a brief from the Ministry of Information Technology and Telecommunication and gave the project Rs5 billion in bridge financing from the R&D Fund.
