ECC Approves Significant Supplementary Grants and Gas Pricing Structure

The Economic Coordination Committee (ECC) of the cabinet convened on Friday and sanctioned 14 summaries, granting technical supplementary funds totaling approximately Rs2.629 trillion. These allocations are designated for various ministries and divisions to address the financial needs of ongoing projects and initiatives during the current fiscal year, 2024-25.

Presided over by Finance Minister Muhammad Aurangzeb, the ECC also endorsed a natural gas pricing framework for the fiscal year 2025-26. This framework permits an increase in gas prices for large-scale consumers, power plants utilizing natural gas, and industrial sectors, averaging around 10%.

The ECC assessed and gave the green light to several technical supplementary grants (TSGs) intended to cover expenses related to continuing projects and initiatives across diverse ministries and divisions for the fiscal year 2024-25.

Key Approved TSGs:
  • Rs829.67 billion and Rs1.774.20 trillion for the Finance Division to facilitate the repayment of domestic and foreign debts, respectively.
  • Rs15.839 billion for the Ministry of Defence to bridge the gap in admissible pay and allowances, employee-related and non-employee-related expenditures, and settle outstanding dues under the Prime Minister’s Package for the martyrs of the recent Pak-India conflict.
  • Rs63 million for the Finance Division to address the shortfall in essential expenditures, specifically rent for office and residential buildings of the Department of the Auditor General of Pakistan for the current fiscal year 2024-25.
  • Rs100 million for the Ministry of Foreign Affairs to cover expenses under the “Other Delegation Abroad” account during the current fiscal year 2024-25.
  • Rs1.765 billion for the Ministry of Interior & Narcotics Control to fulfill operational needs and clear outstanding liabilities of the Frontier Corps KP (North and South) and Frontier Corps Balochistan (North & South) for the current fiscal year 2024-25.
  • Rs300 million for the Ministry of Interior & Narcotics Control to settle outstanding liabilities across various Heads of Account for the ICT Police during the current fiscal year 2024-25.
  • Rs100 million for the Ministry of Interior & Narcotics Control to clear pending liabilities to various vendors providing services and supplies during law and order situations in the ICT region during the current fiscal year.
  • Rs52.241 million for the Ministry of Interior & Narcotics Control to fund the upgrade and provision of the latest investigation equipment and improve the environment at ICT Police stations during the current fiscal year.
  • Rs100 million for the Ministry of Interior & Narcotics Control concerning the Frontier Corps KP (North) during the current fiscal year 2024-25.
  • Rs5.5 billion for Strategic Plans Divisions as rupee cover to Pakistan Space & Upper Atmosphere Research Commission (SUPARCO) during current fiscal year 2024-25.
  • Rs117.97 million for the Petroleum Division to support the PSDP project focused on the expansion and upgrade of the Pakistan Petroleum Corehouse during the current fiscal year 2024-25.
  • Rs254.57 million for the Finance Division to be released to the Government of Balochistan as part of an incentive package for PAS/PSP officers stationed there.
  • Rs198 million for the Ministry of Interior and Narcotics Control for the repair and maintenance of the Executive Building in Islamabad.

The ECC also reviewed a summary from the Petroleum Division, seeking approval for an updated natural gas pricing structure for the fiscal year 2025–26, effective from July 1, 2025.

As per the OGRA Ordinance, the federal government is required to announce revised consumer gas prices within 40 days of OGRA’s determination. This ensures cost recovery and regulatory compliance. The submission is also in line with structural benchmarks agreed upon with the International Monetary Fund (IMF), including the rationalization of captive power tariffs and a transition from cross-subsidies to direct, targeted support for consumers with low incomes.

The ECC took into account the proposed adjustments in energy sector tariffs and resolved to maintain gas prices for household consumers, with only fixed charges adjusted in the domestic sector to recover asset costs. An approximately 10 percent increase in gas prices was approved for bulk consumers, power plants operating on natural gas, and industry.

Furthermore, the ECC examined a proposal from the Ministry of National Food Security and Research (MNFSR) regarding the import of sugar to stabilize its prices. The committee approved the Ministry’s proposal to establish a 10-member steering committee, headed by the Federal Minister for MNFSR and including the Federal Minister for Commerce, SAPM to the Ministry of Foreign Affairs, Secretary Finance Division, and Chairman FBR, among others. The committee is tasked with providing recommendations to the ECC on this matter.

The ECC further deliberated on a summary by the Finance Division concerning adjustments to home remittances incentive schemes. It directed the State Bank of Pakistan and the Finance Division to formulate and present a detailed plan by July 31st, including an impact analysis and a roadmap for a well-managed transition.

The Cabinet body also considered a summary by the Finance Division for the launch of a risk coverage scheme for small farmers and under-served areas, and accorded in-principle approval to the proposal with instructions for further fine-tuning and incorporating in it additional safeguards before its planned launch on 14th August 2025.

The ECC was informed that the scheme is projected to bring approximately 750,000 new agricultural borrowers into the formal financial system and generate a credit portfolio increase of Rs 300 billion over its three-year disbursement period, from fiscal year 2026 to fiscal year 2028. The estimated budgetary requirement to cover risk and operational costs for the banks is Rs 37.5 billion, spread over fiscal year 2027 to fiscal year 2031.

The gathering saw the participation of several key federal ministers, including the Minister for Power, Sardar Awais Ahmed Khan Leghari, the Minister for Petroleum Ali Pervaiz Malik, and the Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, alongside senior officials from diverse ministries and divisions.