Government Is Removing Restrictions On The Import
The government is set to begin removing restrictions on the import of “non-essential and luxury items” imposed on May 19 and provide energy at subsidised rates — electricity at nine cents per unit and gas at $9 per unit — throughout the current fiscal year to make the country’s exports competitive.
Sources told that a special virtual meeting of the Economic Coordination Committee (ECC) had been scheduled for Sunday to approve the subsidised energy rates, but was then postponed at the last moment for a day to be merged with another huddle on Monday with important items on the table.
Government Expected About $3 Billion Inflows
The sources said the government expected about $3 billion inflows from “some friends” during the current week and wanted to give a “confidence and feel-good sense to the market” by supporting five export-oriented sectors and simultaneously clearing import payables and gradually easing restrictions on most imports (except mobile phones and automobiles) imposed on about 85 items for a temporary period.
In consultation with energy and finance ministries and the export sectors, the commerce ministry has sought the supply of electricity at a final, all-inclusive rate of nine cents per unit (kilowatt-hour, or kWh) to five export-oriented sectors — jute, leather, carpet, surgical and sports goods — from July 1, 2022, to June 30, 2023.
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Rate Will Be Applicable Across Pakistan Without Any Disparity
Secondly, the imported and regasified liquefied natural gas (RLNG) would be provided to these sectors at an all-inclusive rate of $9 per unit (million British thermal units, or mmBtu) instead of $6.5 at present. The rate will be applicable across Pakistan without any disparity.
As such, RLNG would be provided to consumers of Karachi-based Sui Southern Gas Company Limited (SSGCL) on the same concessionary tariff as that for Lahore-based Sui Northern Gas Pipelines Limited (SNGPL) consumers of five export sectors.
Restriction On New Industrial Connections
At present, there is a restriction on new industrial connections due to a shortage of natural gas. The government has already allocated Rs60bn for these subsidised rates — Rs20bn for electricity and Rs40bn for RLNG — in the federal budget for 2022-23 to supply energy at concessionary tariff to these sectors.
The finance ministry would give a financial commitment that additional funds, if required by power and petroleum divisions because of higher international prices, would be provided to continue the supply of energy to the export sector at unchanged rates.