Govt announces ‘all-inclusive’ power subsidy for export industries

Published October 6, 2022
<p>Finance Minister Ishaq Dar speaks to the media in Islamabad on Thursday. — DawnNewsTV</p>

Finance Minister Ishaq Dar speaks to the media in Islamabad on Thursday. — DawnNewsTV

Finance Minister Ishaq Dar on Thursday announced a power subsidy package for Pakistan’s export industries with per unit electricity cost set at Rs19.99.

In a media talk after negotiations with the Pakistan Textile Exporters Association (PTEA) in Islamabad, he termed the demand for energy subsidies “just” and promised that the government would bear the difference between the new fixed price and the actual per unit production cost.

“I expect the industries to now increase Pakistan’s exports.”

Dar said the annual burden of the subsidy would amount to around Rs90-100 billion, adding that the “all-inclusive” package was announced for the five major exporting sectors, and not just the textile sector.

He denied that the subsidy would have any impact on the primary or budget deficit, assuring that “everything will be taken care of”.

Meanwhile, in response to a question on whether the International Monetary Fund (IMF) was taken into confidence on the package, the finance minister said: “I don’t need to take [the IMF] into confidence […] when I know what I am doing then it is my responsibility to create [fiscal] space for it and I have done so.”

Dar added that he believed in taking “prudent decisions” and had a source of funds available for the package. “[I will explain it myself] when talks are held with them [IMF delegation] and when they arrive on October 25,” he added.

Dawn had earlier reported that the minister was considering a hefty package of energy subsidies for the textile sector to help it compete with regional countries.

Earlier this year, the PTEA held three meetings with former finance minister Miftah Ismail to sensitise the government about the rising energy cost in the country which rendered textile exports less competitive in comparison with other regional countries.

Market in the ‘right direction’

The finance minister also addressed the continuous depreciation of the US dollar against the rupee, saying that the development occurred without him even doing anything.

“I want to clarify that I can genuinely prove that its (dollar) actual value is below Rs200.”

He said the market was now going in the “right direction” and correcting itself.

Dar added that today’s rupee appreciation brought a reduction of around Rs2,600bn in public debt and liabilities without “giving back even a single rupee”.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Worsening hunger
Updated 08 Dec, 2022

Worsening hunger

THAT the dollar liquidity crunch has started hurting the import of essential items such as vegetables and raw...
Bannu beheading
Updated 08 Dec, 2022

Bannu beheading

The state must take up the cudgels and neutralise barbarism before it spreads.
Smog misery
08 Dec, 2022

Smog misery

IF 2022 has taught us anything, it is that generations of reckless disregard for Mother Nature has accrued very ...
Disquiet on the western front
Updated 07 Dec, 2022

Disquiet on the western front

IT is very difficult for Pakistan to be delinked from Afghanistan, because of reasons of geography and history.
Fuel from Russia
07 Dec, 2022

Fuel from Russia

THE apparent headway made with Russia for the purchase of its crude oil, petrol and diesel at discounted prices is a...
More women SHOs
07 Dec, 2022

More women SHOs

IT is encouraging to see more employment avenues opening up for women in Pakistan, with an increasing number of...