ISLAMABAD: The Finance Division has conveyed to the Economic Coordination Committee (ECC) of the Cabinet that additional funding requirement for provision of electricity at concessionary rates to the export-oriented sectors would be contingent to the International Monetary Fund’s (IMF) consent.

The Ministry of Energy has sought views of the Finance Division on its proposal for providing electricity at 9 cents per kWh and RLNG at $9 per mmbtu all-inclusive to export-oriented sectors.

The Finance Division’s response to the proposal was that there is budgetary allocation under the ongoing fiscal year for providing subsidised electricity and gas supply of Rs20 billion and Rs40 billion respectively.

There is an understanding with the IMF to stay within the allocated budget, Finance added.

The Finance Division further stated that in case of any additional funding requirements, the matter will have to be discussed with the IMF, in consultation with the Ministry of Energy (Power and Petroleum Divisions), as and when required.

Export-oriented sectors: Govt has agreed to supply energy without disparity

Meanwhile, the Finance Division was of the view that as agreement with the IMF hardly provides additional space for subsequent incremental support, therefore, with a view to stay within the budgetary allocation, the Ministry of Energy keeps an eye on the required amount of subsidy implications vis-a-vis budgeted amount on a monthly basis and make recommendations for re-adjustment of the subsidised rates on a quarterly basis accordingly.

The Ministry of Energy wanted that the Finance Division may give a financial commitment that additional funds if required by oriented sectors on concessionary tariff. However, the Ministry of Energy (Power and Petroleum Divisions) may apprise the Finance Division about the budgetary situation in time and place a summary for supplementary grant allocation before the ECC for consideration.

Copyright Business Recorder, 2022