ECC takes up proposal for policy guidelines with respect to sale price of RLNG

July 03, 2020 (MLN): The Economic Coordination Committee (ECC) in its meeting held on Friday under the Chairmanship of Abdul Hafeez Shaikh, took up a proposal for policy guidelines with respect to sale price of RLNG.

The ECC was told that given the ring-fenced nature of RLNG and indigenous gas pricing, the sale of RLNG to domestic gas consumers at weighted average domestic tariff/gas sale price on M/s SNGPL network had resulted into accumulative tariff differential/RLNG revenue shortfall of Rs 73.84 billion for the period July-2018 to April 2020. The ECC was further told that this revenue shortfall had occurred after adjustment of RLNG impact on cost neutral basis as per the policy whereby the SNGPL sold indigenous gas as RLNG to its consumers and recovered some of the revenue shortfalls whenever the surplus system gas became available.

The ECC was also briefed that the issue of RLNG revenue shortfall had arisen mainly because of the price differential in domestic gas as 91 per cent of the domestic gas consumers had been paying an average monthly bill of Rs 121 which was many times less than the price of imported RLNG supplied to domestic consumers in the winter months.

The ECC considered the proposal and asked the OGRA to review it, especially the RLNG revenue shortfall as worked out by the SNGPL, and report back to ECC. The ECC also decided to further discuss the issue in a small group in order to develop a consensus-based solution to the issue for a policy decision at the government level to avoid the creation of a circular debt situation in the RLNG sector.

ECC also approved Rs 29.72 billion to provide cash assistance of Rs 12,000 per beneficiary to 3.725 million applicants irrespective of provincial, regional and district quota under the Ehsas Emergency Cash Programme.

Dr. Abdu Hafeez Shaikh allowed the BISP to spend Rs 29.72 billion from its allocated budget of Rs 200 billion for 2020-21 for providing cash transfers to 3.72 million applicants with the instruction that any additional requirement for regular operations of BISP would be also provided during 2020-21.

The decision came after the Poverty Alleviation and Social Safety Division told the ECC that 3.151 million applicants who had applied for assistance through the SMS, were found eligible under the approved criteria but these applicants could not be provided assistance on account of provincial/district quotas.

The ECC was told that the Punjab government had already agreed to provide assistance to 700,000 of the applicants identified through SMS, leaving 2.451 million eligible applicants who could be provided cash assistance @12,000 (Rs 3000 for four months) at a total cost of Rs 29.72 billion.

The ECC also took up and approved a proposal by the Ministry of Information Technology and Telecommunication for NTC’s Budget for the FY 2020-21 (Budget Estimate Revenue Rs 4.59 billion, operating cost Rs 4.38 billion and ADP Rs 1.23 billion) and NTC Budget for FY 2019-20 (Revised Estimates Revenue Rs 3.95 billion, operating cost Rs 3.93 billion and ADP Rs 1.08 billion).