The Economic Coordination Committee (ECC) of the cabinet on Monday approved two-month salary for the employees of the closed Pakistan Steel Mill, allowed inter-company loan agreement for natural gas pipeline projects and reduced gas tariff for the Independent Power Producers.
The Minister for Finance Ishaq Dar chaired the meeting. ECC considered and approved the proposal submitted by the Privatisation Division for disbursement of one and a half month salary to Pakistan Steel Mills employees.
Privatisation Division sought approval of Rs 570 million for payment of 50 percent remaining salary for the month of August 2016 amounting to Rs 190 million and Rs 380 million for the month of September 2016.
ECC also approved in principal the funding on expenditure of the Inter State Gas Systems (Private) Limited (ISGSL) subject to completion of corporate formalities. The company is responsible for TAPI and IP pipelines as well as from Gwadar Nawabshah and North-South LNG pipelines.
The Ministry of Petroleum and Natural Resources proposed that the Government Holding Private Limited (GHPL) being the parent company will give a three year term loan to ISGSL to fund all its expenditure on all the government mandated projects being undertaken by (ISGSL).
This loan and related interest will be repayable after three years through a single bullet payment on terms separately agreed between GHPL and ISGSL through a loan agreement.
ECC also approved revision of its earlier decision of 17th November, 2016 on the proposal of the Ministry of Petroleum. The decision was reduction in gas sale price for industrial sector and captive power from Rs 600 per MMBTU to Rs 400 per MMBTU which was also applicable to fertilizer sector (only fuel stock) and GST to be charged at Rs 100 per MMBTU on the gas sale price for the aforesaid consumers.
As a consequence of this decision, the differential in cost of production of industrial customers on SNGPL system vs SSGC customers have widened, agitated by the industrial consumers on SNGPL system who sought level playing field.
Therefore, the Ministry of Petroleum and Natural Resources requested ECC for withdrawal of its earlier decision of 17th November 2016 and proposed reduction in gas sale price for power plants stations and Independent Power Producers from Rs 613 per MMBTU to Rs 400 per MMBTU, and the sales tax to be charged at Rs 100 per MMBTU on gas sale for the aforesaid consumers.
The ministry stated that the revise decision in this context will not only result in elimination of price disparity to a large extent but will also reduce electricity generation cost in the country which will provide relief to electricity consumers.