The Economic Coordination Committee (ECC) of the Cabinet has raised the price of imported and local gas for the export industry by more than 38pc and up to 82pc, respectively, and protected power prices at 9 cents per unit for 11 months starting on August 1.
On Monday, state ministers for Finance and Petroleum Dr. Aisha Ghous Pasha and Musadik Malik, as well as former prime minister Shahid Khaqan Abbasi, Defense Minister Khawaja Asif, Power Minister Khurram Dastgir Khan, and Industries and Production Minister Syed Murtaza Mehmood, were present at the ECC meeting, which was presided over by Finance Minister Miftah Ismail.
According to an official statement, the ECC “approved RLNG rate at $9 per mmBtu, all-inclusive to five export-oriented sectors across Pakistan for existing gas connections”. It also recommended to the federal cabinet that the price of indigenous gas be increased for export-oriented sectors to Rs1,350 per mmBtu and for general industry to Rs1,550 per mmBtu. This will primarily apply in Sindh, where the price for export and general industry is currently Rs820 and Rs853, respectively, representing increases of about 65 and 82 percent.
The current price for RLNG to five export industries is $6.5 per mmBtu, which includes jute, leather, carpet, surgical, and sporting products. Thus, the gain amounts to around 38.5 percent. The government budget for 2022–2023 includes a subsidy cover of Rs40 billion for RLNG, which will be evaluated on a weekly basis.
The ECC also approved the electricity rate at US cents 9 per kWh for five export-oriented sectors beginning August 1 subject to Rs20 billion in subsidy provided by the Finance Division in the budget, quarterly review of the subsidy, and provision of a list of industrial units receiving subsidized gas and electricity by the Petroleum Division, within one month to the ECC for review.
The meeting was informed that five export-oriented industries will continue to receive power at a final all-inclusive rate of US cents 9 per unit after regionally competitive energy tariffs had been finalized in conjunction with the finance, energy, and commerce ministries and the export sectors.
A local media report citing sources said that the government wanted to wait until the next meeting of the committee for foreign inflows to come in before opening up a free outflow of foreign currency due to limited reserves. As a result, the summary of the commerce ministry for the gradual removal of the ban on luxury and non-essential imports could not make it to the ECC’s agenda due to the lack of time for consultations.
