Just days before the announcement of Pakistan’s federal budget for 2026-27, the Economic Coordination Committee (ECC) approved more than Rs40 billion in supplementary grants and a Rs100 billion financing facility for Pakistan State Oil (PSO).
The decisions were taken during a meeting chaired by Finance Minister Muhammad Aurangzeb. The approvals come at a time when the government is facing financial pressures and implementing fiscal adjustments.
Besides financial support for PSO, the committee also expanded special honoraria for additional ministries and approved funding for several development, security, and infrastructure projects.
ECC Approves Rs100 Billion Financing Facility for PSO
One of the most significant decisions involved financial assistance for Pakistan State Oil.
The ECC approved letters of comfort and government guarantees worth Rs100 billion to support a syndicated running finance facility for PSO. The measure aims to address liquidity challenges and ensure uninterrupted fuel supplies.
The committee was informed that various state-owned enterprises, particularly gas companies, owe more than Rs904 billion to PSO. Consequently, the company has faced increasing financial strain while managing national fuel requirements.
To support operations, PSO will obtain financing through two banks. The arrangement includes Rs50 billion from Habib Bank and Rs50 billion from the Bank of Punjab.
The borrowing will remain on PSO’s balance sheet.
Additional Honoraria Expanded to More Government Departments
The ECC also expanded the scope of special honoraria linked to budget preparation activities.
Previously, the facility was available to officials in several key institutions, including the Finance Ministry, Revenue Division, Planning Ministry, Federal Board of Revenue, National Assembly, Senate, and Prime Minister’s Office.
Now, the benefit has also been extended to the Law and Justice Division, Commerce Division, and the Accountant General of Pakistan Revenue.
These honoraria can amount to additional payments equivalent to several months of salary. However, the overall fiscal impact of the expansion was not disclosed.
Rs7 Billion Approved for Development Projects
The committee approved a technical supplementary grant of Rs7.026 billion for the Sustainable Development Goals Achievement Programme.
According to officials, the allocation will support ongoing development projects and help prevent cost escalations.
The funding is also intended to ensure timely completion of projects already underway.
Pakistan Navy Receives Rs10.15 Billion for Hangor Project
The ECC approved a summary submitted by the Ministry of Defence regarding funding for the Pakistan Navy.
As a result, Rs10.15 billion was allocated for the Hangor Project under the Rafale Aircraft and Force Development Package 2030.
The project remains part of broader defence modernization efforts.
Committee Reconstituted to Recover Petroleum Levy Dues
The ECC also reviewed the issue of petroleum levy collections linked to Cnergyico.
The committee was informed that concerns had emerged regarding potential conflicts of interest within a previously constituted body handling the matter.
Consequently, a new committee was formed under the finance secretary.
The committee includes representatives from the Law and Justice Division, Petroleum Division, and the Special Investment Facilitation Council.
Its primary responsibility will be to strengthen recovery efforts involving approximately Rs60 billion, including Rs47.5 billion in principal dues.
Interior Ministry Receives Security-Related Funding
Several grants were approved for the Ministry of Interior and Narcotics Control.
These allocations totalled Rs2.826 billion and cover a range of security and operational requirements.
The approved amounts include:
- Rs693 million for security arrangements linked to Islamabad peace talks.
- Rs241 million as compensation related to the Taralai suicide bombing incident.
- Rs528 million for the Pakistan Land Ports Authority.
- Rs800 million for procurement of fast patrol boats for the Pakistan Coast Guards.
- Rs150 million for the National Counter Terrorism Authority.
- Rs414 million for security-related expenses associated with the Reko Diq project.
Additionally, Rs1.884 billion was approved for the expansion of the Safe City Islamabad project.
Funding Approved for State Institutions and Infrastructure Projects
The ECC approved Rs733 million for Pakistan Television Corporation to facilitate salary payments for June 2026.
Meanwhile, Rs183.5 million was allocated to the Special Communication Organisation for the installation of telecommunications sites and towers in Gilgit-Baltistan’s Shigar district.
The Ministry of Parliamentary Affairs also received Rs120 million to cover employee-related expenditures resulting from revised salaries and allowances for parliamentary secretaries.
Billions Allocated for Urban Development Projects
The committee approved major allocations for urban infrastructure initiatives.
These included Rs8.759 billion for Karachi and Hyderabad Urban Infrastructure Development Packages.
In addition, Rs2.84 billion was approved for parliamentary development schemes in Khyber Pakhtunkhwa.
The ECC also approved Rs1.3 billion for Phase-II-A modernization and upgradation of Pakistan Mint.
Gilgit-Baltistan Receives Rs4.38 Billion Support Package
Ahead of upcoming elections, the ECC approved Rs4.377 billion for the Gilgit-Baltistan government.
The funding will support current expenditures and priority initiatives being implemented in the region.
Officials indicated that the allocation is intended to assist ongoing administrative and development requirements.
Other Key Decisions
The committee approved the budget estimates of IPO-Pakistan for FY26.
The approved figures include regular expenditures of Rs914.7 million and projected revenue receipts of Rs918 million.
Additionally, the ECC approved a proposal submitted by the Ministry of Maritime Affairs concerning the operational continuity of Engro Vopak Terminal Limited.
Conclusion
The ECC meeting resulted in a wide range of financial approvals just days before the federal budget announcement. From supporting PSO’s liquidity requirements to funding development projects, security initiatives, and infrastructure schemes, the decisions reflect significant fiscal activity ahead of Budget 2026-27.
With billions of rupees allocated across multiple sectors, these approvals are expected to influence both budget discussions and government spending priorities in the coming fiscal year.
