- The ECC approved a revised tariff structure for K-Electric consumers, leading to an approximate increase of Rs5 per unit over three months.
- The ECC endorsed amendments to include two energy projects.
- An incentive package of Rs80 billion was sanctioned to promote foreign remittances.
In a recent Economic Coordination Committee (ECC) meeting chaired by Finance Minister Ishaq Dar, several important decisions were made to address various economic and utility-related matters. The meeting aimed to tackle consumer price changes, allocate energy projects to Gulf countries, and promote foreign remittances while supporting economically disadvantaged customers and facilitating standardized tariffs. The key highlights are as follows:
The ECC approved a revised tariff structure for K-Electric (KE) consumers, aimed at achieving tariff rationalization. This entails adjustments to tariffs for consumption during the months of April, May, and June 2023. This revised structure, inclusive of taxes and charges, is expected to result in an approximate increase of Rs5 per unit for consumers. The implementation of this tariff adjustment will be phased over the course of three months – July, August, and September 2023.
The Transmission Line Policy 2015 underwent amendments as proposed by the Ministry of Energy. These amendments are aimed at incorporating two energy projects, categorized as ancillary services, into the policy’s scope. Specifically, the 2,000 MVAR Reactive Compensation and the 1,000 MVAR Battery Energy Storage System projects are included.
These projects have received endorsement from the joint civil-military Special Investment Facilitation Council (SIFC) for presentation to Gulf countries. As part of a larger initiative comprising 28 projects, the ECC approved the awarding of these energy projects to Gulf nations on a cost-plus basis. The concession term could extend up to 15 years, dependent on the project’s nature.
In a bid to bolster foreign remittances, the ECC sanctioned a substantial incentive package of Rs80 billion. This package aims to encourage foreign remittances and drive growth in this sector. Furthermore, the ECC authorized an incentive subsidy package of Rs30 billion designed to assist the most economically disadvantaged customers of the Utility Stores Corporation (USC).
To ensure consistent pricing across the nation, the ECC expedited the tariff approval process and introduced new guidelines for the National Electric Power Regulatory Authority (Nepra). Nepra will be responsible for determining quarterly tariff applications for government-owned distribution companies, and this tariff structure will also be applied to KE tariffs.
As part of the efforts to incentivize remittances, the ECC approved several enhancements. This included an increase in telegraphic transfer charges and substantial incentives for incremental growth in remittances from banks. Additionally, a lucky draw scheme was introduced to further incentivize remittances.
The ECC allocated a supplementary grant of Rs3 billion to the Prime Minister’s Health Insurance Scheme for media workers, journalists, and artists. Moreover, the committee approved the allocation of the Film Finance Fund to the Ministry of Information and Broadcasting.