Govt allocates Rs78bn for giving subsidy on power to export-oriented industries

Commerce Ministry to continue providing electricity at $9 per kwh to export-oriented sectors

ISLAMABAD: The federal government on Monday allocated Rs77.957 billion as a supplementary grant during FY2022-23 for the provision of a concessional electricity tariff for export-oriented industries.

Sources said that the Ministry of Commerce has written a letter to Power Division with regard to providing regionally competitive energy rates export-oriented sectors during the current fiscal year.

The Power Division stated that in-principle, it agrees with the proposal to provide electricity at an all inclusive rate of 9 US cents per kWh to the sectors including textile, jute, leather, carpet, surgical and sports from July 1 to June 30, 2023 on observing that the Power Division has cleared subsidy claims of zero-rated industrial consumers amounting to Rs26 billion until March and that the package will continue this year too. 

Similarly, the Commerce Division has initiated a summary for an additional supplementary grant during May on the Power Division’s request, however no decision, allocation or releases were made to the power sector to meet pending subsidy claims.

As of June 30, pending claims of zero-rated industrial consumer of DISCOS and KE for FY22 total Rs26.2 billion and need to be cleared from the current year’s allocation of Rs20 billion. 

Furthermore, the Power Division requires an additional allocation of Rs6.207 billion as a supplementary grant for clearing the previous and current fiscal year’s liability in addition to Rs77.957 billion as additional budgetary allocation for the provision of a concessional power tariff for export-oriented industries in FY23.

The package will be notified for billing once the subject supplementary grant of Rs84.164 billion is released to the Power Division. In case the government approves less allocation, the Power Division will reduce the application of package proportionately. 

 

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Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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