ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday constituted a committee to finalise recommendations on gas price increase that would generate Rs34 billion in additional revenue for gas companies, but without jacking up fertiliser price.

The committee will comprise Prime Minister’s Adviser on Institutional Reforms and Austerity Dr Ishrat Husain, Minister for Economic Affairs Hammad Azhar, Minister for Food Security Khusro Bakhtyar, Adviser to the PM on Commerce and Industries Abdul Razzak Dawood, Energy Minister Omar Ayub Khan, Special Assistant to the PM on Petroleum Nadeem Babar and top officials of relevant ministries.

The committee will submit its report to the ECC meeting expected next Monday.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh chaired the ECC meeting.

Sources said the meeting took up the petroleum division’s summary for gas price increase, but Dr Shaikh noted that it required more clarity because of the complex issues involved, particularly those expected to affect the vast majority of the population, rather than just the gas consumers. Therefore, he sought further deliberations to reach a better informed decision.

ECC approves Rs700m as initial paid-up capital to register Postal Life Insurance Company

For one, the finance adviser desired that key stakeholders, particularly the fertiliser manufacturers, should be called again for a binding agreement that they would not jack up fertiliser prices since the recent cut in urea price by up to Rs160 per 50kg bag had been worked out on the basis of proposed gas price increase and reduction in gas infrastructure development cess (GIDC).

It was felt that the government had taken a sizeable revenue hit by reducing the GIDC to support the agriculture sector but it would go to waste if fertiliser prices go up again with gas price hike. Likewise, CNG owners should also be taken on board that they do not unfairly increase gas prices.

On a suggestion that gas tariff increase be delayed for a few weeks to let the impact of higher billing due to winter consumption subside, PM’s special assistant Babar advised that the choice was between increasing the gas rates now or about Rs35bn subsidy being picked up by the government. He said the gas price hike was already significantly behind schedule and much awaited because it has to meet the revenue requirements of the two listed gas utilities — Sui Northern Gas Pipelines Ltd and Sui Southern Gas Company Ltd.

He explained that in case of a delay, the impact of price hike would have to be kept on the higher side as the revenue gap of Rs35bn would need to be bridged in four months instead of six months. He explained that residential consumers and special Roti Tandoors had been exempted from the price hike as desired by the prime minister.

The ECC approved a grant of Rs153.25 million from the finance ministry’s budget, as technical supplementary grant for the interior ministry, to be given through the Office of the Deputy Commissioner of Islamabad, for compensation to the victims of suicide attack at District courts F-8 Islamabad in March 2014. The finance division supported the proposal in compliance with the orders of the Supreme Court of Pakistan.

In order to register the Postal Life Insurance as public limited company, the ECC approved Rs700m as initial paid-up capital. The amount shall be allocated by the finance division and transferred to the proposed Postal Life Insurance Company. After the approval Postal Life Insurance shall fall under the regulatory framework of the Securities and Exchange Commission of Pakistan.

The ECC approved the creation of Digital Media Wing in the information and broadcasting ministry. Its purpose shall be to effectively counter the fake/libelous news and highlight the development agenda of the government. It directed the ministry to move ahead for the creation of the wing by using its already available resources.

The ECC also approved the amendment in SRO 192(1)/ 2019 dated 11-02-2019 extending exemption from regulatory duty to export-oriented units.

It gave approval to the transfer of Rs31.5m funds in equivalent foreign exchange from the interior ministry to the defence ministry as technical supplementary grant for the logistic support for the maintenance of Cessna aircraft.

Published in Dawn, February 5th, 2020