The export-oriented sectors of the country are likely to get electricity at an all-inclusive discounted rate of Rs. 19.99 per unit, which is Rs. 20 per unit less than that of domestic consumers, who are charged at the rate of Rs. 40 per unit.
According to a report published in Business Recorder, in order to provide discounted electricity to five zero-rated sectors, which include textiles, carpets, sports, surgical, and leather, the government had budgeted Rs. 20 billion in subsidies for the fiscal year 2022–23 (FY23).
The Power Division decided to halt the provision of discounted electricity from October 2022 after Rs. 12 billion of the total subsidy of Rs. 20 billion was spent in only two months, i.e. July and August of FY23.
In line with the conditions of the International Monetary Fund (IMF), the government has been withdrawing subsidies from domestic consumers, but the government is providing subsidies to the powerful sectors despite the Fund’s resistance.
According to sources, the export-oriented sectors pressurized the government to continue to provide discounted re-gasified liquefied natural gas (RLNG) and electricity, and Ishaq Dar, soon after his appointment as the finance minister, agreed to provide electricity at a concessional rate of Rs. 19.99 till June 30, 2023, at an additional cost of Rs. 110.757 billion.
Sources also claimed that an amount of Rs. 26.069 billion is still outstanding against the subsidy of Rs. 103.32 billion for the supply of electricity at 6.5 cents per kWh provided to the export-oriented sectors from January 2019 to June 2022, as the finance division had only released Rs. 77.25 billion against the budgeted amount.
Additionally, an amount of Rs. 7 billion is also outstanding, as the finance division released Rs. 20 billion against the claimed Rs. 27 billion from the period of August 1, 2022, to September 30, 2022.
The estimated funds required from October 1, 2022, to June 30, 2023 stand at Rs. 110.757 billion, meaning that the finance division would need to arrange Rs. 143.826 billion to make good on its agreement of providing discounted electricity to the export-oriented sectors.