Islamabad 27, June 2022: Prime Minister Muhammad Shehbaz Sharif Monday approved the import of super-critical quality coal from Afghanistan in Pakistani rupee instead of dollars to help generate low-cost electricity in the country. Cement sector in Pakistan was major importer of Afghan coal due to higher international coal prices.
Several non-power sectors in Pakistan, including cement and steel plants, are either operating at significantly reduced capacities or shutting down plants on a temporary basis as imported coal prices remain elevated amid bleak domestic output, reported by S&P Global.
Besides, power plants have also been running at lower capacities due to short coal supply and higher prices across all other alternative markets.
Pakistan, which imports nearly 70% of its thermal coal from South Africa, has not been able to do so in the last few months as prices have remained out of bounds due to civil unrest in the country late last year and transportation issues. The situation was further aggravated this year as European demand poured in to replace Russian tonnages banned by the EU to protest Moscow’s invasion of Ukraine.
“Pakistan has been importing coal from Afghanistan due to lower prices. The high-CV 6,000 kcal/kg NAR coal turns out to be almost $150/mt cheaper than the South African coal,” a Pakistan-based cement manufacturer said.
He added, ” Government buying of Afghan coal can create problem for us as alternatives are expensive and there are difficulties in opening of LCs too”.
The prime minister, chairing a meeting to improve the mechanism for transportation of Afghan coal, expressed concerns over the rising price of coal in the international market. He said the rise in coal price was also one of the reasons behind the generation of expensive electricity by the coal power plants operating in the country.
He viewed that the import of Afghan coal in Pakistani currency would save the foreign exchange. The prime minister was told that the import of Afghan coal – initially for Sahiwal and Hub power plants – would save around $2.2 billion annually.
rime Minister Muhammad Shehbaz Sharif Monday approved the import of super-critical quality coal from Afghanistan in Pakistani rupee instead of dollars to help generate low-cost electricity in the country.
The prime minister, chairing a meeting to improve the mechanism for transportation of Afghan coal, expressed concerns over the rising price of coal in the international market.
He said the rise in coal price was also one of the reasons behind the generation of expensive electricity by the coal power plants operating in the country. He viewed that the import of Afghan coal in Pakistani currency would save the foreign exchange.
The prime minister was told that the import of Afghan coal – initially for Sahiwal and Hub power plants – would save around $2.2 billion annually.
