ISLAMABAD-The government has approved special electricity and gas rates for erstwhile 5 zero-rated industries to increase the country’s exports.

“In a meeting held yesterday between the Ministries of Commerce, Finance and Energy, it was agreed that erstwhile 5 zero-rated industries will be given a rate of 7.5 cents (¢) per kWh for July & August and 9 ¢/kWh thereafter. For gas, the rate will be $6.5/MMBtu throughout,” said Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood on Twitter. In wake of the situation created by COVID pandemic, he felt that ministry of commerce has obtained a very good rate. He asked the exporters to concentrate on growth of the country’s exports.

The government would present the proposal in Economic Coordination Committee (ECC) of the Cabinet for approval, said official. Earlier in March this year, the government had extended special electricity tariff at Cents 7.5 per unit to the five erstwhile zero-rated sectors i.e. textile, surgical goods, carpets, leather and sports goods. The government had decided to extend the special relief package at all-inclusive rate of Cents 7.5 per cent from July 1, 2019 to June 30, 2020. The ECC had also decided that Finance Division will pay Rs23 billion as subsidy for FY 2019-20 to the Power Division in the first week of July 2020 with Rs 14 billion to be paid out of the Rs 24 billion budgeted allocation for the gas sector, whereas, Rs 9 billion will be funded through savings from various heads of PSDP. The ECC further decided that for continuation of relief package in FY 2020-21, additional subsidy would be capped at Rs 20 billion. The special relief package which was approved by the ECC after many ifs and buts and immense consultation, expired on June 30, 2020. However, the Finance Ministry had not paid agreed subsidy of Rs 23 billion for the fiscal year 2019-20.

The government has announced the special electricity and gas tariffs in order to enhance the country’s exports. According to the data of Pakistan Bureau of Statistics, the country’s exports had shown an increase of 6 percent and were recorded at $2 billion in the month of July 2020 as compared to $1.89 billion in the same period of previous year. The federal government is working on Strategic Trade Policy Framework (STPF) to enhance the country’s exports. Under the proposed STPF, the government has estimated to enhance the exports to $26 billion in next fiscal year from estimated $23 billion of the ongoing fiscal year. It has been planned that exports would be further increased to $31 billion in 2021-22, $35 billion in 2022-23, $40 billion in 2023-24 and $46 billion in 2024-25.