Planning Division Wants to Discontinue Gas Subsidy From Export-Oriented Industries

The Planning Division has asked the government to abolish subsidy on gas to the export-oriented sector.

The export-oriented sector also has the facility of subsidy on gas and electricity.

Another package of Rs. 26 billion has been recently approved by the Cabinet Committee on Energy (CCOE) for the industry by extending the Time of Use (ToU) tariff scheme.

The Power Division had sought approval of the energy committee for this subsidy for industrial consumers from May 1, 2021, to June 30, 2022.

The Petroleum Division has proposed that the gas subsidy should only be extended to the export-oriented industry, and it should be taken back from other industries such as the textile industry, which is also availing the facility of electricity at discounted rates, in addition to gas subsidy as part of the zero-rated industry.

Despite getting bailouts, the textile sector has been unable to contribute notably to exports. On the contrary, cotton imports went up, which hurt the local farmers and negatively impacted local research.

The government had initially introduced the gas supply scheme for the export-oriented industry. However, the Petroleum Division later said that even industries not exporting textile products were availing the subsidy.

The textile sector was also receiving gas for its captive power plants, and when the government approved a plan for conducting an audit of captive power plants, some industrialists obtained a stay order from the court against that.

Furthermore, the textile industry also obtained a stay order on the payment it owes as cotton cess for researching cotton crops.

Source: Pro Pakistani