Thursday June 13, 2024

Coal import from Afghanistan subject to affordable rates: Miftah

By Mehtab Haider
July 04, 2022

ISLAMABAD: Amid Kabul’s decision to increase the coal prices from $90 per tonne to $200 per tonne, Pakistan has categorically decided that fuel from Afghanistan will be imported if the prices are affordable. Pakistan will move ahead only if there is a viable business deal, a senior government official told The News on Sunday.

Irked by high import bill due to exorbitant prices of petroleum products in the international market, Prime Minister Shehbaz Sharif is exploring ways for cheaper fuel. In this regard, the premier approved the import of coal from Afghanistan in rupees other than dollars. The initiative was aimed at buying cheap fuel and saving foreign reserves. Besides, the reduced transportation cost tends to create a win-win situation for both sides.

Ironically, when Pakistan showed its interest in the Afghan coal, the Afghan government imposed 30 percent duty and taxes on coal, which led to price hike. The Afghan coal price increased from $90 per tonne to $200 per tonne. “The prices of Afghan coal have increased more than double in the last few days. Hence, Islamabad will have to explore all its options before moving ahead,” sources added.

When The News contacted Federal Minister for Finance and Revenues Miftah

Ismail and inquired about the possibility of exploring coal from Afghanistan, he replied that Pakistan was interested to import coal from Afghanistan provided it was available at affordable rates.

The stance of the finance minister indicates that Pakistan would only go ahead if the business deal of importing coal from Afghanistan seems commercially and economically viable. Another senior official of government when contacted said that the import of coal from Afghanistan would be direct business sector transaction. The government run coal-fired power plants will also require import of coal from Afghanistan but it is subjected to viable business plan. The government will also encourage the private sector to import coal from Afghanistan and will facilitate it through better cross border management and rail transport, he said.

The price of coal in international market had touched $425 per tonne in March 2022 in the aftermath of Russia-Ukraine war but now it started declining in recent weeks. However, the prices in the international market are unpredictable owing to uncertain global situation.

Pakistani authorities are avoiding giving the matter a hype due to different dynamics related to Afghanistan, therefore, most of the officials preferred to keep mum on the issue. Coal is an important fuel used for generating electricity worldwide. The biggest producer and consumer of coal is China. Other big producers include United States, India, Australia, Indonesia, Russia, South Africa, Germany and Poland. The biggest exporters of coal are Indonesia, Australia, Russia, the United States, Colombia, South Africa and Kazakhstan.