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PM’s strategy for importing cheaper coal goes wrong!

PM claimed that buying coal in rupees instead of dollars will save foreign exchange but Afghan Taliban wanted to earn more revenue

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Import of super-critical quality coal from Afghanistan in rupees rather than dollars was approved by the Prime Minister Shahbaz Sharif, claiming that the decision will save foreign exchange of the country. On the other hand, the Afghan Taliban have already increased coal exports to Pakistan and increased duties on sales in order to earn more revenue from its mining sector in the absence of direct foreign funding.

Read more: Pakistan Afghan Transit Trade: New Opportunities and Challenges

Mir Mohammad AliKhan, Pakistani investment banker based in Karachi commented on this scenario saying, “2 hours after Shahbaz Shareef announced that he wants to buy coal from Afghanistan, Taliban increased the coal price from $90 a ton to $200 a ton.” He added that this occurs when announcement is made before signing a contract.

The prime minister showed concern about the escalating price of coal on the international market while chairing a conference to strengthen the framework for transporting Afghan coal. However, Premier Shahbaz cited it as the primary reason for the country’s expensive electricity generation from coal-fired power plants.

The prime minister was told that initial requirement of coal is solely for Sahiwal and Hub power plants which would result in saving over $2.2 billion yearly in the import bill.

Moreover, the PM urged all relevant authorities to design an effective strategy for generating cost – efficient electricity in the country and providing relief to domestic consumers and enterprises.

It also addressed the Ministry of Railways to take all essential measures to make sure that the delivery of coal imported from Afghanistan to power plants is prompt.

To speed up the import procedure, the PM instructed the formation of a committee comprising all officials involved, led by the defense minister.