Govt Discontinues Zero Rated Industrial Package for Export Sector

The Ministry of Energy has notified the discontinuation of the Zero Rated Industrial (ZRI) package for the export-oriented sector from March 1, 2023, under the revised Rs. 952 billion Circular Debt Management Plan (CDMP) on the instructions of the International Monetary Fund (IMF). According to an official document available with ProPakistani, the Power Division’s summary titled “implementation of Revised Circular Debt Management Plan” dated 28th February 2023 was considered and approved by the Federal Cabinet on Tuesday. The federal cabinet vides the above-referred decision and approved the discontinuation of the ZRI Package for the supply of electricity at the rate of Rs. 19.99 per kWh (all inclusive) for export-oriented sectors effective from March 1st, 2023. The development comes just weeks after Islamabad first decided to raise the power tariff and eliminate subsidies to meet all conditions of the IMF. Pertinently, the government plans on collecting Rs. 51 billion through the withdrawal of electricity subsidies for exporters and Rs. 14 billion by ending the Kissan Package electricity subsidies in March 2023. The expectation was Rs. 12.13 per unit subsidy on electricity will be removed for the export sector. By June 2023, approximately Rs. 250 billion will be recovered from electricity consumers. The CDMP plan calls for a surcharge of Rs. 3.39 per unit. Moreover, the increase in quarterly adjustments until June will yield Rs. 73 billion. In February, as a result of the quarterly adjustment, electricity could cost up to Rs. 4.46 more than the current rate per unit.