ECC to discuss increase in power subsidies
10 January, 2013
ISLAMABAD: With the growing need of increase in power subsidies due to inefficiencies of power sector, the Economic Coordination Committee (ECC) of the Cabinet is expected to discuss energy situation in the country with special focus on volume of subsidies expected in the ongoing fiscal.
ISLAMABAD: With the growing need of increase in power subsidies due to inefficiencies of power sector, the Economic Coordination Committee (ECC) of the Cabinet is expected to discuss energy situation in the country with special focus on volume of subsidies expected in the ongoing fiscal.
The ECC is scheduled to meet on Thursday (today) under the chairmanship of Finance Minister Dr Abdul Hafeez Shaikh.
Sources said that the total budgetary allocation of subsidies in fiscal year 2012-13 for the power sector have already been consumed in the first half (six months). The total allocation of subsidy for power sector for the whole year on account of tariff differential was around Rs 170 billion to Rs 185 billion in the budget and the entire amount was released by the Finance Ministry in these months.
Sources further stated that the period from December last year to February 2013 is going to be very challenging owing to steep decline in hydel generation and the government would be required to inject more subsidies to contain the load shedding for few hours. A senior official of the Finance Ministry said that any further releases would hit the budget and fiscal deficit in a major way. He further stated that the government might utilise major portion of $700 million Coalition Support Fund (CSF) disbursed by the US for providing subsidies to the power sector.
Federal and provincial governments have flatly failed to recover outstanding dues from the provincial governments and other government department and has been heavily relying on dolling out subsidies from the budget for functioning of the power sector subsidies. The increasing demand supply gap of gas and its load shedding in various localities and need to expedite efforts to bridge demand supply gap are also likely to be discussed by the ECC. Sources said that the Finance Ministry will give a detailed briefing to the ECC about the economic indicators and ongoing review of the economy by the International Monetary Fund (IMF).
The ECC is also expected to consider the possibility for allowing more sugar for exports.
Sources said that Commerce Ministry has moved a summary to the ECC for seeking approval for export 1.2 million tonnes of sugar, besides directing the Trading Corporation of Pakistan (TCP) to maintain a strategic reserve of 500,000 tonnes. The rationale behind this permission was based on the recommendations of the Sugar Advisory Board, taken in its meeting held on November 15, 2012 in Ministry of Industries.
The sugar industry stakeholders during a meeting including representatives of provinces and sugar industry agreed that current stocks of sugar in the country are 1.5 million tonnes, whereas, a total quantity of 4.7 million tonnes will be produced in sugar season 2012-13.
The representative of the PSMA forecast that a total quantity of 5.9 million tonnes of sugar is expected to be available for the year 2012-13 against the annual domestic consumption of 4.2-4.3 million tonnes resulting in 1.7-1.9 million tonnes surplus sugar available in the country.
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