ECC to slash power tariff for export industries today

ISLAMABAD: The Economic Coordination Committee (ECC) of the federal cabinet is expected Tuesday (today) to slash the power tariff for export-oriented industries by 25 percent to Rs9 (less than 10 US cents) per unit, by extending a subsidy of Rs12 billion aimed at reducing Pakistan's yawning balance of trade deficit, a senior Power Division official told The News.

The anticipated ECC decision would reduce the cost of doing business for export industries already exempted from customs duties, making their products more competitive in international markets, said the official.“We are in the process of creating a special category of export-oriented industrial consumers, and for this category, the government has made up its mind to bring down the power tariff to Rs9 from Rs12 per unit,” said the official, who asked not to be named.

The export industries were exempted from the recent hike in natural gas prices for many household and commercial consumers, approved by the government to improve the weak financial position of the Sui northern and southern state gas utilities.

The government also provided support to export industries by slashing the price of imported liquefied natural gas to Rs600 per one million British thermal units (MMBTU), from Rs 1500 per MMBTU, thereby granting a Rs44 billion subsidy.

The senior Power Division official said the ECC was likely to pass on the burden of these subsidies to other electricity consumers, by increasing the power tariff by Rs2 per unit for all other user categories. It would maintain the existing electricity tariff for poorer domestic consumers, who use up to 300 units a month, but would hike the tariff for households using more than 300 units, he said.

To address the crisis of Pakistan's external finances, the Imran Khan government is focused on increasing national exports to $27 billion in the ongoing fiscal year 2018-19, which ends next June. It has already reduced chargeable duties on items of raw material used by export-oriented industries to make finished products for international markets.