Removal of power surcharge, uniform gas price may cost Rs 60 billion per annum

The federal government will have to bear the brunt of Rs 60 billion per annum in case it removes Rs 3.53 surcharge from electricity tariff and announces a unified gas price of Rs 600 per MMBTU, said industry sources. Prime Minister Shahid Khaqan Abbasi has directed the power division to provide an estimate of the financial impact of meeting the textile associations' proposal to reduce electricity price by Rs 3.53 per unit to bring it at par with regional competitors and to implement a uniform gas tariff of Rs 600 per MMBTU across the country.
According to industry sources, the removal of Rs 3.53 per unit surcharge on electricity will cost the government Rs 40 billion besides another Rs 20 billion with one gas price across the country. It may be noted that the export industry is also demanding release of Rs 100 billion sales tax refunds and long term finance facility to revive sick industrial units.
The export-oriented industrial sectors consume over 1500 megawatt electricity and 300 MMCFD bas to keep their operations intact throughout a week. Although, shifting the burden of Rs 60 billion would be a gigantic task for the government but this single step would lead to increase in employment, export and industrial base in the country, said the sources.
It may be noted that former prime minister Nawaz Sharif had announced Rs 3 per unit relief to the industry back in early 2016 but the ministry linked it with Fuel Price Adjustment (FPA) that reduced the actual benefit to 40 paisa. The FPA cost has been in and around Rs 2.60 per unit since January 2016.
On October 12, 2017, with the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) and on October 13, 2017, with All Pakistan Textile Mills Association (APTMA), Prime Minister Shahid Khaqan Abbasi had discussed multiple issues being faced by the exporters and facilitation provided by the government.
The Prime Minister had desired the Ministry of Commerce & Textile to consult textile associations and come up with recommendations on facilitating long-term export growth. The textile associations were requested to provide medium-to long-term recommendations, especially on cost of doing business, to create level-playing field for textile manufacturers and exporters vis-a-vis competitor countries. Prime Minister Abbasi has directed the concerned ministries and departments to finalize the impact at the earliest to finalize the package for industry.