- ECC also approves circular debt management plan, extra surcharge on power
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved an increase in the maximum retail price of Paracetamol and allowed the recovery of Rs76 billion from the consumers in the next four months for refinancing of Power Holding Limited (PHL) debt.
The ECC meeting presided over by Finance Minister Ishaq Dar on Friday considered a summary of moved by the Ministry of National Health Services, Regulations and Coordination and allowed fixation of maximum retail prices (MRPs) of 18 new drugs as recommended by the Drug Pricing Committee (DPC). The meeting was informed that the prices of these 18 new drugs are low as compared to the prices of the same drugs in India.
The Economic Coordination Committee (ECC) of the Cabinet has approved revised circular debt management plan fiscal year 2023 envisaging discontinuation of Kissan package and Zero Rated Industrial package from March 1, 2023 besides quarterly tariff adjustments in the fiscal year 2023 with expected saving of Rs73 billion CD.
The meeting of the ECC presided over by Finance Minister Ishaq Dar has approved Rs952 billion revised Circular Debt Management Plan.
The projected CD flow for the year would be Rs336 billion and revised CD projection after stock payments would be Rs122 billion. The circular debt stock stood at Rs2,374 billion in fiscal year 2023 – Rs765 billion parked in Power Holding Limited, Rs1,509 billion payable to power producers and Rs100 billion payable to GENCOs.
According to plan, the gap in consumer reference rate and projected cost of supplying power will be mitigated through timely tariff increase, reducing DISCOs losses to 16.27 per cent by end of fiscal year 2023.
The projected quarterly tariff adjustment (QTA) from February to March 2023 @ Rs3.21/unit, QTA from March to May 2023 @ Rs0.69/unit and QTA from June to August 2023 Rs1.64/ unit, QTA from September-November 2023 Rs1.98/unit besides improvement of DISCOs losses 16.27 per cent through timely tariff increases by end fiscal year 2023.
In addition discontinue Kissan and ZRI packages from March 1, 2023 discontinuation of Kisan package, markup saving, GST and taxes on collection basis, reimbursement from FBR as well as additional subsidy from government.
The main objectives of CDMP included reducing CD, enabling monitoring of CD, cost of electricity, tariff increase, subsidies, PHL markup, settlement of IPP stock/markup, Non-payments from K-Electric, DISCOs losses as well as recoveries, payment of taxes, governance and monitoring of CDMP.
Rs1/USD variation in exchange rate could result in around Rs5 billion change in power purchase invoice.
The ECC considered another summary of the Ministry of National Health Services, Regulations and Coordination with regard to the MRP of Paracetamol products and decided to fix the MRP of Paracetamol plain tablet 500mg at Rs2.67 and Paracetamol extra tablet 500mg at Rs3.32.
The ECC also considered another summary of the Ministry of National Health Services, Regulations and Coordination and approved the recommendation of the DPC for a reduction in the prices of 20 drugs.
The Ministry of Energy (Power Division) presented a summary on the refinancing of PHL’s debt and a surcharge to recover mark-up payments and after discussion approved the proposal to recover Rs76 billion (except non-ToU domestic consumers having consumption less than 300 units and private agriculture consumers) in four months period from March 2023 to June 2023 through an additional surcharge of Rs3.94 per unit to recover the mark-up charges of the PHL loans.
The ECC meeting also allowed to impose additional surcharge of Re1 per unit for the fiscal year 2023-24 to recover additional mark-up charges of the PHL loans not covered through the already applicable FC [email protected] per unit.
The above surcharges will be applicable to K-Electric consumers to maintain uniform tariff across the country.
The ECC also deferred the PHL’s principal instalments payable in respect of Rs283.287 billion for a period of two years from the date of execution of fresh facilities and directed the Finance Division to issue a government guarantee for repayment of principal as well as interest/fees, etc for the fresh facilities of Rs283.287 billion.
The ECC also deferred the electricity bills for the month of September 2022 for commercial consumers in the flood-affected areas till the next billing cycle and waived off electricity bills for the months of August and September 2022 for the non-ToU domestic consumers having less than 300-unit consumption.
The ECC considered and approved the proposals regarding the recovery of staggered fuel charges adjustment applicable for the months of August and September 2022. The ECC also approved an additional supplementary grant of Rs10.34 billion to cover the waiver of electricity bills in flood-affected areas.
The ECC also considered another summary of the Ministry of Energy (Power Division) and approved the revised circular debt management plan.
Copyright Business Recorder, 2023