Tag: Economic Coordination Committee

  • PM Shehbaz transfers ECC chairmanship to Finance Minister Aurangzeb

    PM Shehbaz transfers ECC chairmanship to Finance Minister Aurangzeb

    Prime Minister (PM) Shehbaz Sharif, in a reversal of his earlier decision, has transferred the chairmanship of the Economic Coordination Committee (ECC) to Finance Minister Muhammad Aurangzeb.

    According to a notification, the ECC will now be led by the finance minister, with ministers of economic affairs, planning, commerce, power, and petroleum being integral members of the committee.

    Previously, PM Shehbaz had announced himself as the chair of the ECC when unveiling the composition of seven major committees. This move had drawn criticism for potentially limiting the authority of the new finance minister. 

    Furthermore, the premier had initially chosen to preside over the Cabinet Committee on Energy (CCoE).

    Similarly, the Cabinet Committee on State-Owned Enterprises (CCoSOEs) was formed earlier under the chairmanship of the finance minister. Accordinng to Aaj News, the Minister for Finance will head the CCoSOEs, with ministers of Maritime Affairs, Economic Affairs Division, Science and Technology, and Housing and Works serving as its members.

    In a report by APP, PM Shehbaz emphasised the government’s commitment to implementing tough economic measures to navigate the country out of crisis while ensuring the protection of the underprivileged segments of society. 

    He stressed that the brunt of these measures would primarily be borne by the affluent, with mechanisms in place to safeguard the interests of the poor and vulnerable.

    Speaking at the meeting of the Apex Committee of the Special Investment Facilitation Council (SIFC), the prime minister disclosed that the International Monetary Fund (IMF) had completed the review for the disbursement of the last tranche of US$1.1 billion, expected to be received next month.

  • Over Rs6.4 billion allocated for Ramzan subsidies: Essential items to be available at reduced rates

    Over Rs6.4 billion allocated for Ramzan subsidies: Essential items to be available at reduced rates

    The government has earmarked Rs6.484 billion to provide essential food items at subsidised rates through the Utility Stores Corporation (USC) during the holy month of Ramzan.

    A substantial portion of the allocation, Rs3.474 billion, will go towards subsidising flour, followed by Rs1.610 billion for sugar and Rs1.4 billion for ghee.

    Additionally, subsidies of Rs25 million for channa daal, Rs12 million for masoor daal, Rs37.50 million for white gramme, and Rs62.5 million for basmati rice are planned. Further, Rs20 million and Rs62.5 million are allocated for Sehlla rice and broken rice, respectively.

    The implementation of the Ramzan relief package is set to commence on March 4th.

    Further breakdown reveals Rs200 million for cooking oil, Rs20 million for washed moong daal, Rs6.25 million for washed maash daal, Rs100 million for chakki baisen, Rs50 million for dates, Rs22.50 million for carbonated drinks (1,500 ml), Rs30 million for squash and syrup (800 ml), Rs150 million for black tea, Rs15 million for UHT milk, and Rs50 million for spices.

    Moreover, an allocation of Rs145 million is designated for an awareness campaign through electronic and print media regarding the Ramzan Package, set to kick off on March 4th, 2024.

    The Economic Coordination Committee (ECC) has greenlit the Ministry of Industries and Production’s proposal for a Rs7.492 billion Ramzan Relief Package. This package aims to provide 19 essential items at subsidised rates through the USC.

    In response to IMF restrictions on untargeted subsidies, the government has opted to provide subsidies exclusively to beneficiaries registered under the PMT-40 of the Benazir Income Support Programme (BISP) for the fiscal year 2023–24.

  • Utility Stores to implement Rs7.492 billion relief package ahead of Ramzan

    Utility Stores to implement Rs7.492 billion relief package ahead of Ramzan

    The federal government is set to implement the Ramzan Relief Package, totaling Rs7.492 billion, through the Utility Stores Corporation (USC) starting March 4, 2024. This initiative aims to provide relief to targeted beneficiaries by offering subsidies on 19 essential items.

    The Economic Coordination Committee (ECC) of the Cabinet approved this decision based on a proposal from the Ministry of Industries and Production. The proposal sought approval for providing subsidies to targeted beneficiaries registered under the Benazir Income Support Programme (BISP) with a net amount of Rs7.492 billion.

    Of this, Rs 5 billion was allocated in the current fiscal year 2023–24 for the Ramzan Relief Package 2024, with the remaining Rs 2.492 billion to be re-appropriated from the current fiscal year budget allocations for the Prime Minister Relief Package (PMRP).

    The ECC directed the Finance Division to release the full subsidy amount of Rs7.492 billion to ensure timely purchases and necessary arrangements for the availability of these items at USC outlets.

    With Ramzan expected to commence on March 11, 2024, the implementation date for the Ramzan Relief Package-2024 was proposed from March 4, 2024, until the last day of Ramzan.

    Since 1991, the government has been providing relief during Ramzan by selling 19 items at subsidised rates through USC outlets. For the fiscal year 2023–24, the federal government allocated Rs35 billion for subsidies on essential items, including Rs30 billion for PMRP and Rs5 billion for the Ramzan Relief Package 2024.

    The Ramzan Relief Package aims to provide maximum relief to the masses. Due to restrictions imposed by the International Monetary Fund (IMF) on untargeted subsidies, subsidies are provided to targeted beneficiaries registered under PMT-40 of BISP for the fiscal year 2023–24.

    The USC is currently serving 26.92 million households registered under PMT-40. To extend assistance to more beneficiaries during Ramzan-2024, it is proposed to provide subsidies on 19 items to targeted beneficiaries registered under PMT-60, reaching an additional 12.73 million households.

  • ECC greenlights 25% sales tax increase on domestic cars

    ECC greenlights 25% sales tax increase on domestic cars

    In a significant development, the Economic Coordination Committee (ECC) of the Cabinet has given its nod to a proposal for increasing the sales tax on vehicles manufactured and assembled within the borders of Pakistan.

    The decision was finalised during a pivotal ECC meeting held in the capital city on Wednesday.

    The proposal, presented by the Federal Board of Revenue (FBR), suggested an elevation in the sales tax applicable to the auto sector, particularly on vehicles produced and assembled domestically.

    Following a comprehensive deliberation, the ECC cabinet sanctioned the process for determining a 25 per cent sales tax rate on locally manufactured and assembled vehicles.

    As per the endorsed proposal, vehicles valued at Rs4 million or equipped with 1400 cc engines will be subject to a 25 per cent sales tax.

    This taxation structure is anticipated to persist in the upcoming budget, signalling potential implications for consumers as a result of the price hike.

    The imposition of a 25 per cent sales tax on 1400cc vehicles is expected to have a direct impact on the pricing structure, leading to a potential surge in vehicle costs. The ECC’s decision aligns with ongoing efforts to streamline fiscal policies in the country.

    In addition to this decision, the ECC also greenlit a substantial subsidy of Rs7,492.75 million under the Ramazan Relief Package 2024.

    Chaired by Caretaker Finance Minister Shamshad Akhtar, the meeting aimed to address the financial aspects of the relief package, particularly subsidising the targeted beneficiaries of the Benazir Income Support Programme (BISP).

    According to a press statement issued by the finance ministry, the subsidy allocation is part of the budget for 2023–24, with a primary focus on providing support to those identified under the BISP. This move underscores the government’s commitment to social welfare initiatives.

    Furthermore, the ECC approved a proposal related to the “Permission to Import Wheat and Export of Wheat Flour under the Export Facilitation Scheme 2021.” This decision, brought forth by the Ministry of Commerce, reflects the government’s strategic measures to balance wheat supply and demand dynamics in the country.

    The ECC meeting signifies a pivotal moment in shaping economic policies, with decisions that carry far-reaching implications for both the automotive sector and social welfare initiatives in Pakistan.

    The approved proposals are poised to contribute to the broader economic landscape and address pertinent challenges in the nation’s fiscal framework.

  • ECC approves Rs7.49 billion Ramzan Relief Package

    ECC approves Rs7.49 billion Ramzan Relief Package

    In a significant move to provide relief to the general public during the upcoming Ramazan, the Economic Coordination Committee (ECC), in its latest meeting chaired by the Federal Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar, approved the Ramzan Relief Package-2024.

    The approved package, with a net amount of Rs7.49 billion, is specifically designed to benefit targeted beneficiaries of the Benazir Income Support Programme (BISP). This allocation is part of the budget for the fiscal year 2023-24.

    During the meeting, the committee also discussed and gave the green light to a summary from the Ministry of Commerce’s Tariff Policy Wing.

    The summary pertained to “Individual Tariff Rationalization Proposals from Different Sectors for Review of Custom Duties.” Following thorough deliberations, the committee advised that tariff rationalization should be coordinated with the overall trade policy.

    Furthermore, a proposal related to the “Permission to Import Wheat and Export of Wheat Flour under Export Facilitation Scheme 2021” was presented by the Ministry of Commerce.

    The ECC not only approved this proposal but also directed the relevant ministries to prepare comprehensive plans aimed at enhancing opportunities for value-added exports.

  • NEPRA greenlights Rs1.52 per unit hike in power tariff for Karachi residents

    The National Electric Power Regulatory Authority (NEPRA) has granted approval for an increase in the electricity tariff by Rs1.52 per unit for consumers of K-Electric.

    In accordance with the directive from the Economic Coordination Committee (ECC) in June 2023, NEPRA has issued a notification officially declaring a rise of Rs1.52 per unit in electricity charges, according to a press release.

    These adjustments will be reflected in the monthly electricity bills spanning from December 2023 to November 2024.

    A spokesperson for K-Electric clarified that NEPRA’s notification aligns with a previous ECC decision related to charges from the preceding tenure.

    In a statement, the spokesperson mentioned, “The prolonged duration in finalising KE’s tariff has contributed to the current circumstances, resulting in lower charges from Karachi compared to other regions in the country. Operating within the regulated framework of Pakistan’s power sector, KE, like other DISCOS, adheres to decisions made by the government of Pakistan and NEPRA concerning power tariffs.”

    It is noteworthy that lifeline consumers are exempted from the recent increase in charges, providing relief to this specific consumer group, the statement added.

    In a previous development this month, the Economic Coordination Committee (ECC) made a decision regarding the uniform quarterly tariff adjustments for K-Electric consumers, approving a hike of Rs1.72 per unit.

    The decision entails that the tariff rationalization guidelines previously issued to the National Electric Power Regulatory Authority (NEPRA) shall be applicable to the consumption of July, August, and September 2023, to be recovered from K-Electric consumers in December 2023, January 2024, and February 2024, respectively.

    Subsequent to this decision, the electricity tariff for K-Electric consumers will experience an increase of Rs1.72 per unit.

    Sources indicate that there will be a hike of Rs1.25 per unit in terms of quarterly adjustment from January to March 2023, while Rs0.47 per unit will be increased in terms of quarterly adjustment from October to December 2023.

    These measures are taken to ensure uniform electricity tariffs across the country, as per sources familiar with the matter.

  • Tariff hike of Rs1.72 per unit approved for K-Electric consumers 

    Tariff hike of Rs1.72 per unit approved for K-Electric consumers 

    The Economic Coordination Committee (ECC) has granted approval for quarterly tariff adjustments of Rs1.72 per unit for K-Electric, alongside government guarantees of Rs100 billion for Pakistan State Oil (PSO) and a Rs20 billion credit facility for Punjab’s Green Cooperative Initiative. 

    The ECC session, presided over by Federal Minister for Finance Dr Shamshad Akhtar and attended by other federal ministers and senior officials, addressed various summaries submitted by ministries such as Interior, Maritime Affairs, Energy (Power Division), Energy (Petroleum Division), Poverty Alleviation and Social Safety, and Defence. 

    The decision to adjust the tariff for K-Electric was reached after careful consideration of a summary presented by the Ministry of Energy regarding “Uniform Quarterly Tariff Adjustments for K-Electric Consumers on a par with XWDISCOs 2nd and 3rd Quarterly FY 2023.” 

    Following in-depth discussions, the ECC concluded that the tariff rationalisation through adjustments for K-Electric, aligning with the uniform Quarterly Tariff Adjustment (QTA) guidelines already issued to NEPRA, will be applicable to the consumption of July, August, and September 2023.  

    According to The News, these adjustments are set to be recovered from K-Electric consumers in December 2023, January 2024, and February 2024, respectively. 

  • IMF-backed gas price hike in Pakistan aims to tackle rising circular debt

    IMF-backed gas price hike in Pakistan aims to tackle rising circular debt

    The Economic Coordination Committee (ECC) recently made a decision to raise gas prices, a move that financial experts at Topline Securities, a brokerage firm, believe is a crucial step in Pakistan’s efforts to reach an agreement with the International Monetary Fund (IMF). This agreement is set for review in November.

    The decision to increase gas prices is seen as a necessity due to the alarming escalation of gas circular debt, which has now reached a staggering Rs2.1 trillion.

    Unfortunately, this debt is increasing at a rate of Rs350–400 billion annually, as stated by the Energy Minister.

    The IMF has consistently advocated for reducing circular debt by raising gas tariffs, as it places a substantial burden on Pakistan’s fiscal accounts. We anticipate that this, in conjunction with the rationalisation of power tariffs, will pave the way for Pakistan to secure a staff-level agreement during the November review.

    Notably, the ECC approved the proposed tariff schedule submitted by the Ministry of Energy, which will come into effect on November 1, 2023, instead of the initially proposed date of October 1, 2023.

    According to the approved schedule, there will be an increase of up to 173 per cent for non-protected domestic consumers, 136 per cent for commercial consumers, 86 per cent for export, and 117 per cent for non-export industries.

    Looking ahead, Pakistani authorities are gearing up for discussions with the IMF during the upcoming review of the $3 billion loan programme scheduled for November.

    Analysts predict that the rise in gas tariffs will help to minimise the disparity in gas tariffs for Sui Southern Gas Company (SSGC) and Sui Northern Gas Company Limited (SNGPL), resulting in a positive impact on their cash flow.

    The combined revenues of both Sui companies, which totaled around Rs1.6 trillion, are expected to experience significant improvement following this gas price hike as the tariff differential narrows.

    Furthermore, the increase in gas prices will have a positive impact on exploration companies like the Oil & Gas Development Company (OGDC) and Pakistan Petroleum (PPL) as it aids in reducing gas circular debt.

  • Govt approves massive gas tariff hike, raising concerns of growing financial hardship

    Govt approves massive gas tariff hike, raising concerns of growing financial hardship

    The government’s recent decision to approve a substantial increase in gas tariffs, set to take effect from November 1, 2023, has significant implications for the public and the country’s economic situation. 

    This decision was made during a meeting of the Economic Coordination Committee (ECC) of the Cabinet, led by Finance Minister Dr Shamshad Akhtar. The gas tariff increase, reaching up to 193 per cent, will have a profound impact on the already inflation-weary masses.

    This decision comes in anticipation of an impending review by the International Monetary Fund (IMF), scheduled for later in the month, which had urged Pakistan to address the escalating circular debt in the energy sector.

    The approved plan involves various changes to gas tariffs. For protected consumers, the fixed monthly charges will increase from Rs10 to Rs400, while non-protected consumers will witness a rise from Rs460 to Rs1,000, with higher slabs potentially reaching up to Rs2,000. 

    Additionally, the government has raised local gas tariffs for different consumer groups, with non-protected domestic consumers facing a 173 per cent increase, commercial users a 136.4 per cent hike, exports an 86.4 per cent increase, and non-export industries a 117 per cent tariff rise. 

    Exporters will experience an 86 per cent tariff increase, effective November 1, 2023. It’s worth noting that the tariff hike was initially proposed to begin on October 1, 2023, but it has now been scheduled for implementation in November 2023.

    The meeting also addressed other significant issues. The Ministry of Industries and Production presented a proposal to meet urea requirements for the Rabi season 2023–24, which was approved by the ECC. The committee also emphasised the need for uninterrupted gas supply to the fertiliser industry and urged provinces to play a more proactive role in sharing the importation cost.

    Additionally, the ECC reviewed a summary from the Earthquake Reconstruction and Rehabilitation Authority (ERRA), which sought approval for a Technical supplementary grant of Rs484 million. 

    This grant aims to cover pay and allowances for 415 contract and project employees from July 2023 onwards. The ECC directed the Ministry of Planning, Development, and Special Initiatives to identify sources for financing ERRA employees’ salaries.

    Lastly, the ECC approved a summary from the Ministry of Finance regarding the establishment of the National Credit Guarantee Company Limited. 

    This company will play a crucial role in supporting credit enhancement for Small and Medium Enterprises (SMEs), contributing to the development of these businesses.

    In summary, the government’s decision to increase gas tariffs significantly will impact various consumer groups and is a response to economic challenges, especially the circular debt issue. 

    The ECC meeting covered multiple important topics, including measures to address urea requirements, financial support for earthquake reconstruction, and initiatives to boost SMEs through the National Credit Guarantee Company.

  • Winter chills and rising bills: Govt may hike gas tariff by up to 200%

    Winter chills and rising bills: Govt may hike gas tariff by up to 200%

    The interim government is in the process of preparing a significant gas tariff increase proposal, set to be presented to the Economic Coordination Committee (ECC) tomorrow. 

    According to ARY News, the Petroleum Division will lay out a plan for a 200 per cent hike in gas tariffs for various consumer categories, with domestic consumers facing a 172 per cent increase in anticipation of the upcoming winter season.

    The proposal encompasses a broad spectrum of changes, including a 200 per cent price hike for different consumer categories and a staggering 3,900 per cent surge in monthly fixed charges for protected consumers, soaring from Rs10 to Rs400.

     For non-protected consumers, the plan suggests an increment of Rs100 for those using 0.25 cubic metres per month, Rs300 per mmBtu for those using 0.60 cubic metres, and up to Rs1,900 per mmBtu for consumers utilising 300 cubic metres per month.

    Export units may see their rates rise from Rs950 to Rs2,050 per mmBtu, while non-export units might face an increase from Rs1,400 to Rs2,600 per mmBtu. The CNG sector could experience a hike of Rs2,595 per mmBtu.

    For other industries, the suggested rates are Rs2,900 per mmBtu for the cement sector and Rs4,400 per mmBtu for the CNG sector. However, the current rates for power generation units and tandoors are expected to remain unchanged.

    Sources indicate that the caretaker finance minister has called for an ECC session at 4:00 pm on Monday, proposing the implementation of these gas tariff adjustments starting on October 1. 

    Earlier, there were reports from within the finance ministry that the International Monetary Fund (IMF) had urged Pakistan to promptly increase gas tariffs by 100 per cent to address the losses and circular debt in the country’s gas sector.

    The IMF, during a virtual meeting with Pakistan’s finance ministry officials, expressed concerns over the failure to raise gas tariffs on July 1, emphasising that this was a violation of their standby agreement. 

    The IMF further advised the recovery of a Rs46 billion loss incurred by gas companies from July to September. It should be noted that caretaker Finance Minister Dr Shamshad Akhtar is currently in China.