In a significant move, the interim government, during its latest session, granted sovereign guarantees of Rs100 billion to Pakistan State Oil (PSO) to stave off bankruptcy. Simultaneously, the government approved the recovery of Rs1.72 per unit as an electricity price hike from K-Electric (KE) consumers.
The Economic Coordination Committee (ECC) convened to address pressing economic issues, failing, however, to reach a consensus on increasing gas prices for fertilizer plants after subsidy withdrawal. Despite agreeing to continue subsidized gas supplies until December’s end, the ECC refrained from formalizing the decision, awaiting a summary from the relevant ministry.
As outlined in a statement from the Ministry of Finance, the ECC endorsed a summary from the Ministry of Energy, extending the government’s guarantee ceiling of Rs100 billion in favor of PSO until December 2024. The extension is contingent on the Finance Division’s approval of terms and conditions for each financing facility upon renewal.
PSO grapples with a severe liquidity crisis, with receivables reaching Rs755 billion due to circular debt in the gas and power sectors. The ECC’s approval aims to avert the imminent risk of default resulting from non-payment.
Additionally, the ECC sanctioned a Rs20 billion interest-free loan from the deficit-ridden government of Punjab to Green Corporate Initiative (Private) Limited, a company associated with the Green Pakistan Initiative. The ECC urged direct engagement between the provincial government and companies under the Green Pakistan Initiative for future disbursements.
The ECC also addressed a summary submitted by the Ministry of Energy concerning uniform quarterly tariff adjustments (QTA) for KE. Consumers can anticipate a Rs1.72 per unit increase, with specific application periods and recovery schedules detailed for clarity.
Furthermore, the ECC granted Rs20,000 per month to 8,000 individuals working at the Chaman border, with the condition that the provincial government bears the cost. The Benazir Income Support Programme (BISP) is tasked with examining registered daily-wage workers at the Chaman border for eligibility and allocating support from its budget, later reimbursed by the Finance Department, Government of Balochistan.
In a move supporting Pakistan Rangers Sindh, a technical supplementary grant of Rs47.45 million for repair and maintenance of helicopters was approved, as outlined in a summary by the Ministry of Interior.
Lastly, the ECC approved the release of Rs5 billion as bridge financing from the R&D Fund for the Digital Information Infrastructure project, following a summary from the Ministry of Information Technology and Telecommunication.
