For the duration of the current fiscal year, the government will offer energy at subsidized rates — electricity at nine cents per unit and gas at nine dollars per unit — in order to boost the competitiveness of the nation’s exports. The restrictions on the importation of “non-essential and luxury items” that were put in place on May 19 will start to be lifted.
According to sources, the Economic Coordination Committee (ECC) had a special virtual meeting planned for Sunday to approve the subsidized energy tariffs, but it was abruptly postponed for a day to be combined with another meeting on Monday with significant topics on the agenda.
The sources stated that the government anticipated $3 billion in inflows from “some friends” during the current week and wanted to instil “confidence and a feel-good sense in the market” by assisting five export-oriented sectors, paying off import payables simultaneously, and gradually removing temporary restrictions on the majority of imports (aside from mobile phones and cars) of about 85 luxury items.
The commerce ministry has requested that power be supplied to five export-oriented industries — jute, leather, carpet, surgical, and sporting goods — from July 1, 2022, to June 30, 2023, at a final, all-inclusive pricing of nine cents per unit (kilowatt-hour, or kWh).
Second, rather of paying the current rate of $6.5 per million British thermal units (mmBtu), these sectors would get the imported and regasified liquefied natural gas (RLNG) at an all-inclusive pricing of $9 per mmBtu. The rate will be uniformly applied throughout Pakistan.
As a result, RLNG would be offered to Sui Southern Gas Company Limited (SSGC) customers in Karachi at the same discounted rate as Sui Northern Gas Pipelines Limited (SNGPL) customers in the five export areas.
However, due to their significant negative effects on foreign exchange, the importation of mobile phones and automobiles would be prohibited for the foreseeable future.
According to the sources, the majority of the other commodities had higher value addition and employment impacts but lower foreign exchange expenses.
However, according to these sources, expensive phones and cars that were already in the importation process when the ban was put in place were already given relief last week by being allowed to leave the port with a 5 percent surcharge after arriving within two weeks of May 19 and a 15 percent surcharge for items that arrived two weeks after the ban but before June 30.
To read our blog on “Import ban on luxury items to benefit the country: PM Shehbaz,” click here.
