The finance ministry said on Wednesday that the Afghanistan government has more than doubled coal prices as it attempts to reduce its budget deficit after losing access to international aid and increasing revenue from coal exports.
An important source of income for cash-strapped Afghanistan comes from customs duties on coal shipped to Pakistan. Since the new administration took office in August of last year, sanctions on the banking industry and a reduction in development funds have significantly hurt the country’s economy.
According to Ahmad Wali Haqmal, a spokesman for the finance ministry, the administration this week increased coal prices from $90 per tonne to $200 per tonne. Each day, 12,000 to 14,000 tonnes are exported, most of which go to Pakistan.
The Afghan government has stated that it wants to reduce its reliance on international help.
Afghan authorities will earn $60 per tonne from the hike in customs charges from 20% to 30% in May, which according to Haqmal is anticipated to make a sizable hole in the nation’s anticipated 44 billion Afghani ($502.11 million) budget deficit this year.
A week ago, Pakistani Prime Minister Shehbaz Sharif announced plans to acquire coal from Afghanistan using the local currency to conserve foreign reserves. The price increase happened immediately after his announcement.
“(The timing) was an accident. Any nation would act irresponsibly if it abruptly increased the price without careful thought and research, according to Haqmal.
According to a Pakistani source, they had heard rumors that the pricing was being reevaluated for weeks.
South Africa was Pakistan’s primary coal supplier. Recent weeks have seen an increase in South African coal prices as a result of increased demand from Europe.
Hamal declined to comment on the choice but had previously stated that all customs charges would be collected in Afghanis and that transactions were between private businessmen.
Hamal added that a group of technical staff members had worked for weeks to determine the price after researching local markets, domestic circumstances, and rising worldwide coal costs as a result of the conflict in Ukraine.
According to him, the calculations were made to ensure that Afghan dealers could earn the most money while preventing Pakistani traders from switching to alternative trading methods.
To make customs facilities open 16 hours a day rather than the present 12 or so, authorities were also working to ease traffic at border crossings, where hundreds of trucks pass through each day.