LAHORE - The PML-N government seems to be working against its policy of encouraging coal use by the industry, as is evident from its decision of increasing duty on coal import in the budget for fiscal year 2015-16.

Prior to the announcement of budget, the government was claiming that it is struggling hard to convert maximum of the industry on coal due to severe gas shortage and give incentives to the industry to maximise coal use but its decision of increasing duty on coal import from 1 per cent to 5 percent, instead of withdrawing it, suggests that the government is working against its stated policy of encouraging coal use.

Although the government is claiming that it is keenly involved in creating alternate energy sources in the country, but on the other hand it is also taking such adversary measures of imposing duties on the import of coal which is beyond comprehension and would only confuse the potential investors and the industry. Many industries have already switched to coal and many others are also converting to coal due to unavailability of gas, so this duty is to nullify the positive initiative of the government to use coal as an alternate energy source. Representatives of cement sector termed the move unrealistic and expressed grave concern over it. “This kind of action would jeopardise government’s initiative in fetching investment in alternative energy projects,” they said.

“The industry, on government directions, invested huge sums in order to switch their plants from gas to coal. But this sudden increase in import duty on coal in budget 2015-16 has rendered us unviable in the international market,” they said.

They said due to the energy crisis the industrial production is not in accordance with the manufacturing capacity, and due to this underutilisation, the country is not fetching the full potential of foreign exchange earnings.

Muhammad Ali Tabba, the chief executive of the Lucky Cement as well as the chairman of the All Pakistan Cement Manufacturers’ Association, claimed that there is no duty on any other fuel and the coal is the only fuel which has been brought under the customs duty regime. He requested the government to withdraw import duty on coal as it is a direct injustice to the cement industry.