• ECC greenlights Multan-Rawalpindi oil pipeline, Rs3bn flood relief package for Gilgit-Baltistan
• Gas levy funds to reduce power tariffs for all consumers

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved a financial bailout for Pakistan Television (PTV), a recovery plan for Rs47 billion in outstanding petroleum levy from Cynergico Refinery, and the use of funds collected under the captive levy on gas to reduce electricity rates for all consumers.

The committee also gave the green light to the construction of the Multan to Rawalpindi oil pipeline in partnership with Azerbaijan and sanctioned Rs3 billion in relief for flood-affected families in Gilgit-Baltistan. Finance Minister Muhammad Aurangzeb chaired the meeting.

The captive levy, imposed as part of the government’s agreement with the International Monetary Fund (IMF), applies to gas and RLNG supplies to captive power plants of industrial units.

Introduced on July 1 it began at 5pc above the notified tariff, with scheduled increases to 10pc from Aug 1, 15pc from Feb 1, 2026, and 20pc from Aug 1, 2026. An act of parliament mandated that revenue generated from this levy be used exclusively to lower electricity tariffs for all consumer categories.

Following the levy’s introduction, some influential business groups sought to channel the funds solely towards industrial sector electricity rates. However, the Power Division resisted, citing legal obligations under the Captive Levy Act to benefit all consumers.

Adjustment mechanism

The ECC upheld the Power Division’s stance and approved a monthly fuel cost adjustment (FCA) mechanism to pass on the benefits of the levy to all electricity consumers. Under the system, the Petroleum Division will remit collected levy funds to the Finance Division within two days after each month closes.

The Power Planning & Monitoring Company (PPMC) will calculate the relief amounts based on electricity sales data and forward recommendations to the National Electric Power Regulatory Authority (Nepra), which will then incorporate the benefits into consumers’ bills with a two-month lag. For example, levy collected in January will be credited in March bills based on January consumption.

Recovery

On the issue of petroleum levy recovery, the ECC approved a framework to recover approximately Rs47.5bn from Cynergico PK Limited (CPL), which has defaulted on payments since 2019. Including late payment surcharges, CPL’s liability stands at about Rs60bn.

Despite financial difficulties, CPL has resisted settling even the principal amount. The Special Investment Facilitation Council (SIFC) mediated a settlement plan, under which CPL will pay roughly Rs1bn monthly to clear the outstanding dues. The Petroleum Division was authorised to sign the settlement deed and instructed to ensure strict adherence to the repayment terms.

PTV bailout

The ECC also sanctioned an Rs11bn bailout for Pakistan Television Corporation for the current fiscal year. This move follows the government’s decision to waive the PTV fee on electricity consumers from July 1, 2025. The waiver severely impacted PTV’s revenue, leaving it unable to meet staff salaries, pensions, and other liabilities. Under the bailout plan, the Finance Ministry will immediately release Rs3.8bn to cover the first quarter’s expenses, followed by Rs2.396bn for each of the remaining three quarters. This shifts the financial burden from electricity consumers to taxpayers.

Oil pipeline

In a significant move for energy infrastructure, the ECC approved the tariff framework for the Machike-Thallian-Tarrujabba white oil pipeline, a government-to-government project with Azerbaijan. The Frontier Works Organisation, Pakistan State Oil, and Azerbaijan’s Socar will establish a joint project company to manage the pipeline.

The Oil & Gas Regulatory Authority (OGRA) will set a transportation tariff in US dollars applicable to the entire route from Multan to Tarrujabba (near Peshawar). The agreement requires oil marketing companies to commit to minimum annual pipeline volumes, with shortfalls compensated through inland freight equalisation margins. The tariff model is designed for optimal pipeline utilisation under a “default mode of transportation.”

The Finance Ministry’s prior demand to rationalise payouts and reduce liabilities was overruled in favour of ensuring the pipeline’s timely launch, reflecting its strategic importance in strengthening bilateral ties between Pakistan and Azerbaijan.

Lastly, the ECC approved a Rs3bn relief package for flood-hit communities in Gilgit-Baltistan, aimed at providing tents, medicines, food, and other essential supplies. This humanitarian support was issued under the Prime Minister’s directives to assist those affected by recent heavy rains in the region.

Published in Dawn, August 27th, 2025