ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Monday has given approval for provision of subsidised gas and electricity to the five export-oriented sectors across the country for one year (till June 30, 2023) to reduce cost of manufacturing and enhance exports.

Ministry of Commerce presented a summary on regional competitive energy rates for export oriented sectors during financial year 2022-23. It was submitted that in pursuance of the decisions of ECC dated 16th August 2021 and the Federal Cabinet dated 24th August 2021, the government provided energy to the export oriented sectors namely textile including jute, leather, carpet, surgical and sports goods at regional competitive rates to reduce cost of manufacturing and enhance exports.

The ECC, which met under the chair of Finance Minister Miftah Ismail, has approved to supply electricity at 9 cents per kWh and RLNG at $9 per MMBTU without disparity and all inclusive to five export-oriented sectors namely textiles including jute, leather, carpet, surgical and sports good across the country for one year. The government would provide Rs60 billion subsidy on providing subsided electricity and gas to industries. The ministry of commerce has claimed that Rs20 billion for electricity and Rs40 billion for RLNG have been allocated under federal budget 2022-23 to supply energy at concessionary tariff to five export oriented sectors.

Earlier in this month, a high level meeting chaired by Prime Minister Shehbaz Sharif had agreed that electricity at 9 cents per kWh and RLNG at $9 per MMBTU all-inclusive will be provided to export-oriented sectors. The ministry of commerce has recommended the ECC for providing electricity at 9 cents per kWh all-inclusive to export oriented sectors from July 15, 2022 to June 30, 2023. Meanwhile, it has proposed that RLNG may be provided at $9 per MMBTU all-inclusive to five export-oriented sectors from July 1, 2022 to June 30, 2023 across Pakistan without any disparity. It further recommended that RLNG may be provided to SSGC consumers on same concessionary tariff as that of SNGPL consumers of five export oriented sectors. It has also asked that Finance Division may give financial commitment that additional funds if required by Power and Petroleum Divisions shall be provided to continue supply of energy to export oriented sectors on concessionary tariff.

According to ministry of finance, the ECC after detailed discussion approved RLNG rate at $9 per MMBTU, all inclusive to five export oriented sectors across Pakistan for existing gas connections. A subsidy cover of Rs. 40 billion for RLNG has been allocated under federal budget 2022-23 which will be reviewed on quarterly basis. Further, ECC recommended to the federal cabinet to raise the tariff of indigenous gas for export oriented sectors at Rs. 1350 per MMBTU and for general industry at Rs. 1550 per MMBTU.

Government would provide Rs60 billion subsidy on providing subsided electricity and gas to industries

The ECC also approved the electricity rate at US cents 9 per kWh to five export oriented sectors from 1st August 2022 subject to (i) subsidy of Rs. 20 billion provided by Finance Division (ii) quarterly review of the subsidy (iii) Petroleum Division will provide a list of industrial units getting subsidized gas and electricity, within one month to the ECC for review.

The ECC also approved supplementary grant of Rs. 750 million for Ministry of Information and Broadcasting for 75 years’ Independence Day celebrations.

The ECC also approved proposal of Ministry of Interior for payment of compensation/goodwill package from its own budget. Federal Minister for Defence Khawaja Muhammad Asif, Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Federal Minister for Power Khurram Dastgir Khan, Shahid Khaqan Abbasi – MNA, Minister of State for Finance and Revenue Dr Aisha Ghous Pasha, Minister of State for Petroleum Musadik Masood Malik, Rana Ihsan Afzal, Coordinator to PM on Commerce & Industry, federal secretaries and senior officers attended the meeting.