Zero-rated sectors granted power, gas concessions

ISLAMABAD: The government has granted zero-rated export-oriented industries special concessions in power and gas tariffs with an aim to spur exports that are stuck in a downward spiral for long, an notification said on Wednesday.

Ministry of Energy (Power Division) in its notification said, for this purpose, an amount of Rs10 billion, available to petroleum division for RLNG, had been transferred to the power division.

“These special 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,” the notification said.

The notification cited the ECC decision of September 8, 2020 in which the committee had said, “since it is expected that Rs10 billion available to petroleum division for RLNG would remain unutilised, therefore, the same may be transferred to Power division”.

“For the month of July and August 2020, electricity may be provided at US cents 7.5/kWh all inclusive and thereafter at US cents 9/kWh all inclusive for rest of the financial year 2020/21 to export oriented sectors including textiles, leather, carpets, surgical, and sports goods,” it said.

The LNG may be charged at US$6.5/mmbtu to these special sectors regardless of whether the actual is higher or lower.

“Since the future financial requirements to provide electricity and gas at concessionary rates for FY21, therefore the Finance Division may give financial commitment that additional funds, if requirement by the Power and Petroleum Divisions, shall be provided,” the notification said.