ECC nods subsidised electricity supply to exporters till June

ISLAMABAD: The government on Wednesday extended the period for subsidised electricity supply to five export-oriented sectors up to June this year, in a bid to boost exports.

The Economic Coordination Committee (ECC) of the cabinet took the decision during a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh.

The ECC approved a proposal by power division for a special relief package to further continue provision of subsidised electricity to five export-oriented sectors till June 2020.

In January last year, the government revised down electricity tariffs for the exporters to 7.5 cents per kilowatt-hour (kWh). Nonetheless, exporters voiced concerns over the bills that offset benefits of the subsidy program. The apex trade body Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said the government announced an all inclusive tariff of 7.5 cents/kWh for the five export sectors in January last year to improve competiveness of the exporters.

However, the ministry of energy earlier this year directed power distribution companies to charge surcharges and other levies on the industrial electricity consumption, bringing the aggregate cost up to 13 cents/kWh, FPCCI said in a statement then.

Export sector is still struggling to lend support to external account sector despite rupee devaluation and incentives announced by the government. Exports fell one percent to $22.9 billion in the last fiscal year of 2018/19.

However, exports marginally improved around four percent $15.6 billion in the first eight months of the current fiscal year. Share of exports to GDP is lurking below 10 percent, posing a challenge for the economy heavily reliant on foreign debts, remittances and foreign investments to meet international payment obligations.

The ECC further discussed proposal to increase wheat support price by Rs50 to Rs1,400 per 40 kilograms.

The committee would convene a special session on Thursday (today) to discuss a detailed plan to keep the flour prices at the lowest possible level throughout the year in view of any increase in support price and incidental charges for supply of Pakistan Agricultural Storage and Services Corporation-procured wheat to provinces and allied issues related to procurement of wheat by provinces and the private sector.

The committee approved a proposal by ministry of energy (power division) for two amendments aimed at providing ease of doing business to upstream petroleum sector.

The amendments are related to extension of exploration licences beyond two years by ECC rather than the minister in-charge of petroleum division and creation of a new Zone-1 (F) for onshore licencing regime and consequent revision in the zonal map.

The ECC also okayed the National Telecommunication Corporation's revised budget estimates for 2018/19 and 2019/20. The committee gave in-principle approval to a proposal for foreign equity investment of 22.5 million Saudi Riyal ($5.9 million) by a food firm Eastern Products Pvt (Ltd) Pakistan.