ISLAMABAD: The Economic Coordination Committee (ECC) of the federal cabinet, in a meeting chaired by Finance Minister Muhammad Aurangzeb on Monday, sanctioned a one-year extension of the Rs50 billion sovereign guarantee for liquefied natural gas (LNG) imports.
Additionally, the committee approved the release of Rs38.5 billion for the federal share in converting 27,000 agricultural tube wells in Balochistan to solar power.
The ECC also greenlit nine supplementary grants amounting to Rs3.119 billion for various ministries and departments.
A key item on the agenda was the Petroleum Division’s proposal to extend the validity of sovereign guarantees associated with a Rs50bn running finance facility, which was secured by Sui Northern Gas Pipelines Limited (SNGPL) for LNG procurement.
The guarantee has now been extended through June 2026, following a review of the company’s improved financial standing.
The committee further authorized the disbursement of Rs24.5 billion to complete the federal government’s commitment for solarising agricultural tube wells in Balochistan.
The total project cost is estimated at Rs55 billion, of which 70% (Rs38.5bn) is being funded by the federal government, while the remaining 30% (Rs16.5bn) will be borne by the Balochistan provincial government.
The initial Rs14bn tranche had already been disbursed. The ECC instructed the Power Division to actively oversee critical aspects of the project—especially the disconnection of tube wells from the national grid and the removal of transformers and other associated hardware.
The committee requested a detailed progress report in July.
Supplementary Grants
The ECC meeting also sanctioned nine supplementary grants, totaling Rs3.119 billion. These include:
- Rs1.269bn redirected from the now-defunct Public Works Department to the Ministry of Finance.
- Rs300 million allocated to the Cabinet Division to operationalize new regulatory authorities.
- Rs250 million designated for the upgradation of Sadiq Public School, Bahawalpur.
- Rs109 million earmarked for purchasing support equipment for the Civil Armed Forces as part of the UN Peacekeeping Missions.
- Rs500 million for operational needs of Frontier Corps (North KP).
- Rs25.9 million for maintenance of a Cessna aircraft.
- Rs556.8 million for the functioning of 36 benches of the Inland Revenue Appellate Tribunal across the country.
- Rs106 million granted to the National Energy Efficiency and Conservation Authority (NEECA) for replacing 88 million energy-inefficient fans, potentially saving up to 5,000 MW of peak power demand.
- Rs2.32 million for the Frontier Constabulary’s training center at Michni, near Peshawar.
Refineries Raise Alarm Over Taxation and Upgrade Hurdles
Separately, the CEOs of Pakistan’s leading oil refineries met with Finance Minister Aurangzeb to discuss the significant financial and regulatory challenges they face in modernising their operations.
Read More: ECC Greenlights Circular Debt Management Strategy
The refinery representatives argued that implementing their upgradation plans could potentially save the country approximately $1 billion annually by cutting dependence on imported refined petroleum products.
However, they raised alarms over recent changes in the sales tax regime—specifically, the shift from zero-rated to exempt status on petroleum products.
According to the delegation, this change has led to a notable spike in both operational and capital costs, making the planned upgrades financially unsustainable under current conditions.
They warned that the burden of non-refundable input taxes, due to the exemption regime, is undermining the viability of their business models.
In response, the finance minister assured the delegation that their grievances—especially regarding the sales tax policy—would be reviewed in detail.
Also Read: ECC Approves Reko Diq Project Funding
He emphasized the government’s commitment to supporting the refinery sector and acknowledged the importance of upgrading domestic refining capacity to reduce import reliance and preserve foreign exchange.
