ISLAMABAD(National Times)- Less than a week before the next budget, the Economic Coordination Committee (ECC) of the cabinet on Friday approved more than Rs40 billion in supplementary grants and a Rs100bn sovereign-guarantee-backed financing facility for the Pakistan State Oil (PSO), which is facing over Rs900bn in receivables from other state-owned enterprises, raising concerns about smooth oil supplies.
And despite financial constraints forcing development cuts in the name of IMF restrictions, the ECC meeting, presided over by Finance Minister Muhammad Aurangzeb, also allowed Rs10bn additional funds for parliamentarians’ development schemes and expanded the scope of special honoraria running up to six-month additional salaries to more ministries and departments involved in federal budget preparations.
The benefit, already available to officials in around a dozen ministries and entities, including finance, revenue, planning, development, FBR, National Assembly, Senate and the Prime Minister’s Office, was expanded to the Law and Justice Division, Commerce Division and the Accountant General of Pakistan Revenue (AGPR). The fiscal impact was not disclosed.
The meeting also changed the composition of a committee set up to settle about Rs60bn in petroleum levy dues charged to consumers but allegedly withheld by Cnergyico Refinery since 2019, citing concerns over conflict of interest, and ordered a tightened recovery plan.
An official statement said the ECC approved a summary submitted by the Cabinet Division for Rs7.026bn through a technical supplementary grant for the Sustainable Development Goals Achievement Programme (SAP).
“The allocation will facilitate continuity of development projects, prevent cost escalations, and timely achievement of programme objectives,” the statement said.
Officials said the finance minister was under pressure from the leadership to provide funds for parliamentarians’ schemes in the outgoing fiscal year despite an about Rs175bn cut in the core development programme.
The ECC also approved a summary of the Ministry of Defence for Rs10.15bn for the Hangor Project of the Pakistan Navy under the Rafale Aircraft and Force Development Package (RAFDP)-2030.
The committee approved letters of comfort and government guarantees worth Rs100bn for PSO through a syndicated running finance facility to address its liquidity constraints and ensure uninterrupted oil supplies.
The meeting was informed that state-owned enterprises, particularly gas companies, owed more than Rs904bn to PSO, making it increasingly difficult for the company to manage supply challenges under current geopolitical conditions.
Instead of arranging recovery of those payments, the ECC approved borrowing of Rs50bn each from Habib Bank and Bank of Punjab to meet oil requirements. The borrowing will appear on PSO’s balance sheet.
The meeting also took up the Deed of Settlement with Cnergyico PK Limited, which had collected petroleum levy from consumers but allegedly did not deposit it in the government treasury. The company is also seeking benefits under the Refining Policy for the upgradation of existing brownfield refineries.
The ECC had earlier approved the constitution of a committee under the Special Investment Facilitation Council (SIFC) to resolve the late payment surcharge issue.
Subsequently, the Law and Justice Division proposed amendments to strengthen safeguards for government revenues by requiring Cnergyico to deposit incremental incentives in a joint escrow account with Ogra and restricting withdrawals until the outstanding petroleum levy and late payment surcharge amounts were fully settled.
The ECC was informed that the composition of the committee needed to be reviewed due to concerns over potential conflict of interest arising from the inclusion of the Cnergyico chief executive officer.
A new committee was constituted under the convenership of the finance secretary, comprising representatives of the Law and Justice Division, Petroleum Division and SIFC, to resolve the late payment surcharge issue with Cnergyico and strengthen recovery of around Rs60bn, including Rs47.5bn in principal amount.
The committee approved seven grants for the Ministry of Interior and Narcotics Control worth Rs2.826bn.
These included Rs693m for security arrangements for the Islamabad peace talks, Rs241m as compensation for the suicide bombing at Imambargah Khadijah-tul-Kubra in Taralai, Islamabad, Rs528m for the Pakistan Land Ports Authority, Rs800m for procurement of fast patrol boats for the Pakistan Coast Guards, Rs1.884bn for the expansion of the Safe City Islamabad project, Rs150m for the National Counter Terrorism Authority and Rs414m for security charges relating to the Reko Diq project.
The ECC approved Rs733m for Pakistan Television Corporation for payment of salaries for June 2026 and Rs183.5m for the Special Communication Organisation for installation of telecom sites and towers in Shigar district of Gilgit-Baltistan.
It also approved Rs120m for the Ministry of Parliamentary Affairs to meet employee-related expenditures arising from revised salaries and allowances of parliamentary secretaries during FY26.
The meeting approved two grants for the Ministry of Housing and Works for placement of development funds into the current account of Pakistan Infrastructure Development Company Limited. These included Rs8.759bn for Karachi and Hyderabad Urban Infrastructure Development Packages and Rs2.84bn for parliamentary schemes in Khyber Pakhtunkhwa.
The ECC also granted Rs1.3bn for the Modernisation and Upgradation of Pakistan Mint Phase-II-A and Rs4.377bn to the Gilgit-Baltistan government to support current expenditure requirements and priority initiatives launched ahead of elections.
The committee also approved budget estimates of IPO-Pakistan for FY26, submitted by the Ministry of Commerce, comprising regular expenditure of Rs914.7m and projected revenue receipts of Rs918m.
The ECC also approved a summary of the Ministry of Maritime Affairs regarding the operational continuity of Engro Vopak Terminal Limited.
