ISLAMABAD: The Finance Ministry would be required to provide Rs77.9 billion to the Power Division if it wanted to provide electricity at a subsidised rate to the five export-oriented sectors for the entire fiscal year of 2022-23.
Sources said that the Power Division in response to the Ministry of Commerce Textile Wing’s letter in its comments on a draft proposal regarding regionally competitive energy rates of energy for export-oriented sectors, stated that it would be required this amount for the fiscal year 2023.
The Power Division, in principle, agreed to the proposal to provide electricity at subsidised tariff of US$9 per kWh all-inclusive to the five export-oriented sectors – textiles inciting jute, leather, carpet, surgical, and sports goods – from 1st July 2022 to 30th June 2023. However, the Power Division said that it cleared the subsidy claims, Rs26 billion, of zero-rated industrial consumers up to March 2022; however, the package continued till 30th June 2011 without additional budget available.
A summary was initiated by the Commerce Division on the request of the Power Division for an additional supplementary grant in May 2022, but no decision/ allocation was made to the power sector to meet the pending subsidy claims.
The sources said that according to the Power Division, as of 30th June 2022, pending claims of zero-rated industrial consumers of Discos and KE for 2021-22 are Rs26.207 billion, which are required to be cleared from the current year allocation of Rs20 billion, whereas, the Power Division required an additional allocation of Rs6.207 billion as the supplementary grant for clearing previous year liability.
The Power Division required Rs77.957 billion additional budgetary allocation as the supplementary grant during fiscal year 2022-23 for the provision of concessional tariff to export-oriented industries for consumption during the fiscal year 2023 and the package will be notified for billing once the supplementary grant of Rs84.164 billion is approved/ released to the Power Division.
The ECC was informed that in case the government approves less allocation, then it (the Power Division) will reduce the application of package proportionately for such months/ days as can be met from such allocation and in case dollar parity changes, the amount of subsidy would also be varied.
Copyright Business Recorder, 2022