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ECC plunders masses of Rs50b for gas companies, approves 23pc hike in tariff, Rs9.43/L POL cut?

ECC plunders masses of Rs50b for gas companies, approves 23pc hike in tariff, Rs9.43/L POL cut?

ISLAMABAD: The federal government, after giving the masses Rs9.43/litre relief in petroleum, oil & lubricant (POL) prices, has shocked the nation as the Economic Coordination Committee (ECC) of the Cabinet has approved 23 per cent increase in gas tariff from Jan 1 to recover about Rs69 billion from the consumers and to give Rs50 billion to gas companies. The ECC also issued policy guidelines for the Oil and Gas Regulatory Authority (Ogra) in this regard.

As per details, Rs50 billion have to be generated for the gas companies – Rs33 billion for the Sui Northern Gas Pipelines Limited and Rs17 billion for the Sui Southern Gas Company Limited. The Ministry of Petroleum and Natural Resources also proposed a uniform gas tariff for categories of consumers that include commercial, industrial, CNG, captive power plants and power houses.

Current gas tariff for commercial sector stands at Rs636.83 per mmbtu, industrial Rs488.23 per mmbtu, CNG Rs656.52 per mmbtu, cement Rs742.97 per mmbtu, fertiliser sector Rs123.41 per mmbtu for gas used as feed, Rs488.23 per mmbtu for gas used as fuel for electricity generation, Rs488.23 per mmbtu for Wapda and KESC, captive power plants and IPPs for power generation.

The ECC, under the chairmanship of Finance Minister Ishaq Dar, also approved the compensation to the growers of basmati rice at 5000 per acre subject to the following provisions: total amount of compensation may be shared equally among Federal and provincial governments. The total amount of subsidy will be around Rs10 billion. The compensation will be made to the small growers of 25 acres only. The farmers who have already received compensation against crop damage in recent floods in Punjab will not be eligible to this additional compensation.

Meanwhile, the Committee also considered and approved the proposal moved by the Ministry of Water and Power for allowing extension of subsidy to the agriculture consumers at Rs10.35 per unit till 30.6.2015. According to the earlier decision, Ministers of W&P and Finance had decided in a meeting with the representatives of Kissan Ittehad (in August 2013) to subsidise tariff for the agriculture consumers whereby the Federal Government bore the tariff differential subsidy and provincial governments were directed to pay the GST. In today’s decision it was also decided that the GST will be adjusted against the electricity fee payable to the provinces. It is also important to mention that during peak hours agri- tube wells will not be entitled for power supply.

Ishaq Dar said that the amount paid in subsidy will be around Rs22 billion which was around Rs18.5 billion last year but the Federal Government has taken the decision to support farmers as with the help of this decision Punjab has given historic crop of wheat production 19.470 million ton during 2013-14, the Fuel Price adjustment will also be paid by the federal government, added the Minister.