The National Assembly on Thursday passed “The Export-Import Bank of Pakistan Bill, 2022” with a majority vote aimed at establishing a facility for the promotion of international trade.
The bill was moved by Minister of State for Finance and Revenue Dr Aisha Ghaus Pasha in the house for passage. The house passed the bill with a majority after reading clause by clause.
Under this proposed law, the Export-Import Bank of Pakistan will be established. The bank will obtain reinsurances from any foreign agencies or any insurance companies in or outside Pakistan. The bank will also provide its own or with other financial institutions or insurance providers in or outside Pakistan, trade financing, trade credit insurance and equity participation.
According to clause 7 of the bill related to borrowing, “The bank may, for the purpose of the bank’s business, borrow in local or foreign currency on such terms and conditions as may be prescribed by the Board and subject to the provision of other laws, from the following sources, namely- (a) the federal government, (b) international, bilateral and multilateral agencies, (c) financial institutions, (d) the public by issuing, on its or through a wholly-owned or controlled subsidy, securities in or outside Pakistan; or (e) through such other means as may be permitted under the prudential regulations or is otherwise approved by State Bank.”
According to a statement of the bill, “the government has taken several initiatives for the promotion and development of international trade as well as export-oriented industries and import substitution in the national economic interest.”
“In continuation of its efforts and reforms, and in line with best international practices, the government of Pakistan intends to establish the Export-Import Bank of Pakistan as the national export credit agency for the promotion, expansion and diversification of international trade by providing credit, guarantee and insurance products as well as ancillary services to exporters and importers, in the form of statutory, corporation that has the backing and support of the government of Pakistan as is customary for export credit agencies to achieve their desired potential and objectives.”
The clause 5 (2) of the bill described as, “(a) that all assets rights, powers, authorities, privileges and all properties, moveable and immovable, cash and bank balances, reserve funds, investments and all other interests and rights in, or arising out of such properties and all, or part of, debts, liabilities and obligations whatever kind of the existing Export-Import Bank of Pakistan Limited subsisting immediately before the date of the order shall stand transferred to and vest in the Bank: (b) that all the contracts entered into, or the rights, licences, approvals and consents acquired and all matters and things to be done by, with or for the existing Export-Import Bank of Pakistan Limited before the date of the order shall be deemed to have been incurred, entered into, acquired or engage to be done by, with or for the Bank, as the case may be;(c) that all suits and other legal proceedings instituted by or against the exiting Export-Import Bank of Pakistan Limited before the date of the order shall be deemed to be suits and proceedings instituted by or against the Bank as the case may be and be deal with accordingly.(d) that the continuance of the services of all the permanent employees (excluding personnel on secondment, deputation or probation) of the EXIM Bank of Pakistan Limited in the Bank on not less favourable than the exiting terms and conditions of their services, rights and privileges and other matters as were applicable to them before the date of the order.”
Earlier, Minister of State for Petroleum Dr Musadik Malik informed the House that the government is giving around 68-88 percent per unit subsidy to domestic gas consumers of two lowest slabs, which constitutes 91 percent and 80 per cent of total households connected with the networks of SNGPL and SSGC respectively.
Responding a calling-attention notice by MNAs Aliya Kamran, Syed Mehmood Shah, the minister said that the previous government has imposed a ban on the domestic gas connection. He said that reservoirs of gas are decreasing at the rate of 10 percent annually in the country.
He said that around Rs162 billion subsidy was being given to the domestic gas consumers, Rs81 billion to the zero-rated industry, and Rs18 billion to the fertiliser sector annually on account of LNG supply.
Due to massive subsidies, he said the gas sector’s circular debt had reached Rs1.4 trillion figure because of the wrong policies of the PTI government.
Answering a question, the minister said at present the country was producing around 3,460 Million Cubic Feet per Day (MMCFD) gas against the demand of 6,653 MMCFD gas, adding if looked at the “system gas” that could be injected in the supply lines it stood at 1600-1700 MMCFD. While, around 1,200 MMCFD Re-gasified Liquefied Natural Gas (LNG) was being injected in the system through two LNG terminals, established during the previous tenure of the Pakistan Muslim League-Nawaz government, he added.
He said around 800 MMCFD gas was provided to consumers at the network of the Sui Northern Gas Pipelines Limited (SNGPL) and 825 MMCFD at the system of the Sui Southern Gas Company (SSGC), adding it reached 950 MMCFD and 1,350 MMCFD in winter at the transmission system of the two companies respectively.
He said, “If the depletion continues at the same ratio, by the year 2030, the LNG share in the total energy-mix of the country would be around 76 per cent and natural gas 24 percent” said the minister, adding that during the peak winter season, almost 97 per cent of imported LNG was supplied to the domestic consumers to meet their needs, selling the commodity below the purchase price that had been putting an extraordinary burden on the national exchequer.
He said it was unjustified that the government was importing the LNG that cost almost four times more than the natural gas being supplied to different consumers with massive subsidies.
In the coming days, he said the government would share a complete roadmap to achieve the much-needed self-reliance in the energy sector, giving a special focus on increasing the oil and gas exploration activities in potential areas of the country and encouraging the private sector in the LNG business.
Answering a question, the minister assured the House that the government would reconsider the Iran-Pakistan gas pipeline project and look into the possibilities, keeping in view the international sanctions imposed on the commodity-exporting country.