In response to the Taliban regime’s decision to increase the sale price of coal to Pakistan, China-based firms have threatened to suspend imports from Afghanistan. The warnings came after the Taliban government unprecedentedly raised the export prices of coal by at least 30% in July after Pakistan PM Shehbaz Sharif’s government sought to purchase coal from the war-torn country. According to the Business Recorder reports, the prices were raised from $90 per tonne to $200 amid the global spike in fuel and energy prices.
This has led to a concerning rise in electricity prices in Pakistan, directly impacting Chinese subsidiary firms operating in the country. According to Pakistan-based media reports, Chinese firm Huaneng Shandong Ruyi (HSR Pakistan), in a written letter to Pakistan’s electricity board National Electric Power Regulatory Authority (NEPRA), urged authorities to decrease the burgeoning prices within the coming weeks. The firm noted that the sudden spike in price despite hour-long blackouts in Pakistan came against the ever-increasing rate of the dollar against the Pakistani Rupee and subsequent increase in tariff. The firm said it will suspend coal imports from Afghanistan unless Islamabad met the demands listed in the letter.
Blackouts in Pakistan increase as energy crisis deepens
The Pakistan government is reeling under a steep economic crisis, struggling to meet the fuel and energy needs of its citizens. To prevent further deterioration of the crisis, the Pakistan government has pushed for limiting operating hours in large commercial establishments. The regional governments have also imposed a five-day work week to cope with the escalating shortage of generating fuel and petroleum products amid skyrocketing energy costs globally. According to SP Global, Pakistan’s hydroelectric power generation also fell sharply in the northern provinces with conditions amplifying to worse through May and June when temperatures touch nearly 45 degrees Celsius.
China planning to own PSC in Pakistan to protect CPEC assets
While Pakistan is grappling with a collapsing economy, China has boldened its pressure on Islamabad in various ways to ensure the safety of its China-Pakistan Economic Corridor (CPEC) assets in the country. According to reports, China is eyeing establishing its own private security company in Pakistan to protect the Chinese citizens and the CPEC-related developments amid the growing anti-Chinese sentiments in Pakistan. The decision stemmed from the recent deadly targetted attacks on Chinese nationals for which the Baloch militants claimed responsibility.
China has pushed for the arrangement for quite some time now, Japan-based Nikkei Asia reported. The publication further added that Islamabad Interior Ministry, however, refused to comply with the demands, assuring Beijing that the Pakistan security forces will be able to offer protection to Chinese nationals and CPEC assets. A local private security consultancy in Pakistan associated with the Chinese told Nikkei Asia that Beijing was looking forward to assembling its own security facility after 10 Chinese citizens were killed in a targeted bus attack in Dasu last year.