The government has notified an all-inclusive fixed and subsidised electricity rate of Rs19.99 per unit for five export sectors for nine months beginning Oct 1 to facilitate exporters to compete with regional peers.
All distribution companies including K-Electric “are advised to provide electricity at the rate of Rs19.99/kWh all-inclusive to the five export-oriented industries — textiles, leather, carpet, surgical and sports goods — from Oct 1 to June 30, 2023,” reads a notification issued by Power Division of the Ministry of Energy (PDME) on Thursday.
The notification said the Economic Coordination Committee (ECC) of the Cabinet had approved on Oct 10 a summary of the Ministry of Commerce seeking regionally competitive energy rates (RCET) for the export-oriented sectors for FY23 under a concessional tariff scheme. The federal cabinet ratified the ECC decision a day later on Oct 11.
All the power companies have been asked to ensure that bills issued to export-oriented industrial consumers are based on fixed rates approved by the ECC and the Cabinet with effect from Oct 1.
The price differential subsidy arising out of the fixed rate against an average basket price of about Rs32 per unit has been estimated at around Rs90-100bn. These export sectors would not be charged fuel cost adjustments and other taxes and Rs19.90 per unit would be the final rate until June 30, 2023.
After negotiations with textile exporters, Finance Minister Ishaq Dar announced early this month the continuation of RCET at Rs19.99 per unit to five export sectors.