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Consideration industrialists, home customers, these are your new gasoline costs 



The caretaker authorities of Pakistan has accepted a rise in pure gasoline costs for various classes of customers, efficient from November 1, 2023. The choice was made after the Financial Coordination Committee (ECC) and the Federal Cupboard reconsidered the abstract submitted by the Petroleum Division, which adopted the recommendation of the Oil and Gasoline Regulatory Authority (OGRA).

The federal government mentioned that the rise in gasoline costs was vital to advertise the environment friendly use of the scarce commodity, make sure the sustainability and affordability of the availability chain, and keep away from additional accumulation of round debt. The federal government additionally cited the challenges of dwindling pure gasoline reserves, devaluation of rupee, inflation, and imported liquefied pure gasoline (LNG) as components that elevated the price of gasoline.

The Worldwide Financial Fund has been stringent in its emphasis on addressing the deficiency within the gasoline sector’s round circulate, as a part of the standby association. 

OGRA had truly issued its Estimated Income Necessities (ERR) for the fiscal yr 2023-24 for each Sui Northern Gasoline Pipelines Restricted (SNGPL) and Sui Southern Gasoline Firm (SSGC)  on 2 June 2023, . In line with this willpower, SNGPL and SSGC required revenues of Rs 358 billion and Rs 339 billion respectively.

According to Part 8(3) of the OGRA Ordinance 2002, it was incumbent upon the federal authorities to instruct OGRA to regulate client gasoline costs in accordance with authorities coverage. This adjustment was to be efficient from 1st July 2022 and applied inside 40 days of OGRA’s willpower. Regrettably, this revision in client gasoline costs has not been actioned thus far. As a consequence of this inertia in value adjustment, the Sui corporations have already shouldered the income shortfall for the interval from July to September 2023. This case underscores the pressing want for motion to rectify this monetary imbalance.

“There’s a staggering variation throughout varied non-protected slabs within the new pricing. Penalising solely bulk home customers serves no objective — it’s akin to treating a symptom reasonably than the illness,” exclaims Afia Malik, Senior Analysis Economist at PIDE.  

“Round debt within the gasoline sector is a actuality.  The crucial for deregulation within the pure gasoline sector is evident as day — it’s an important step in direction of addressing this urgent subject. Tariffs should pivot in direction of a cost-of-service foundation, and subsidies and cross-subsidies should be consigned to historical past to make sure monetary viability. The apply of cross-subsidisation throughout sectors has solely served to encourage inefficient use. Piped pure gasoline is a minimum of a luxurious; its misuse should be curtailed with quick impact,” provides Malik. 

So, what are the brand new tariffs? 

Home (Residential) Shoppers

The federal government claimed that it has protected the low-income households and companies by preserving their costs low or unchanged. For instance, there isn’t a enhance in gasoline value for 57% of the home customers who fall within the protected class. The federal government has additionally launched a set month-to-month cost of Rs. 400 for as much as 0.25 hm3 consumption. Furthermore, the sale value for gasoline provides to roti tandoors stays unchanged.

The next desk exhibits the outdated and new costs for home customers:


Slabs Previous Charges (Rs./mmbtu) New Charges (Rs./mmbtu) Mounted month-to-month cost (Rs.)
As much as 0.25 hm3 200 300 400
As much as 0.5 hm3 300 150 400
As much as 0.6 hm3 300 200 400
As much as 0.9 hm3 400 250 400
As much as 1 hm3 400 1,000 1,000
As much as 1.5 hm3 600 1,200 1,000
As much as 2 hm3 800 1,600 2,000
As much as 3 hm3 1,100 3,000 2,000
As much as 4 hm3 2,000 3,500 2,000
Above 4 hm3 3,100 4,000 2,000


Different Classes

The federal government mentioned that it has rationalised the gasoline costs in North and South areas to create a stage taking part in discipline for everybody. It has additionally developed a Regionally Aggressive Vitality Tariff (RCET) for export industries by consulting with stakeholders. The federal government mentioned that it goals to discourage captive utilization by export and non-export prospects and encourage conservation of gasoline in sectors the place gasoline use is inefficient or the place alternate fuels can be found.

The next desk exhibits the outdated and new costs for different classes:


Class Previous Charges (Rs./mmbtu) New Charges (Rs./mmbtu)
Bulk 1,600 2,000
Sp. Business (Roti Tandoor) 697 Unchanged
Business 1,650 3,900
Energy (KE, SNPC, EPQL) 1,050
Liberty Energy 2,406 3,890
Fertilizer Feed (Engro) $ 0.7/mmbtu 200
Fertilizer Feed (FFBQL) 510 580
Fertilizer Gasoline 1,500 1,580
Cement 1,500 4,400
Export Ind. Course of 1,100 2,100
Export Ind. Captive 1,100 2,400
Non-Export Ind. Course of 1,200 2,200
Non-Export Ind. Captive 1,200 2,500
CNG 1,805 3,600


The knock off results 

“An upswing in gasoline costs is a boon for oil and gasoline exploration companies and gasoline utilities, fortifying their money flows. Conversely, it offers a blow to companies tethered to gas-captive energy crops,” states  Rao Aamir Ali, Vice President of Analysis at Arif Habib. “As for its affect on inflation, it instantly contributes to an roughly 80 foundation factors impact,” Ali continues.

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FBR freezes PIA’s financial institution accounts over Rs55bn unpaid federal excise responsibility



The Federal Board of Income (FBR) has taken motion to freeze all financial institution accounts of Pakistan Worldwide Airways (PIA) attributable to non-payment of federal excise responsibility, including to the airline’s ongoing monetary challenges.

FBR officers report that PIA’s excellent liabilities for federal excise responsibility have reached Rs55 billion as much as September 2023. Regardless of repeated notices, the airline has failed to handle these obligations. Moreover, the tax liabilities for October 2023 stay unresolved as tax returns for that month are but to be filed.

The Massive Taxpayers Unit (LTU) in Karachi, a subsidiary of FBR, executed the freezing of PIA’s accounts with the purpose of recovering the excellent tax liabilities. Already, an quantity of Rs1.5 billion has been recovered and deposited into the nationwide treasury. Banks have been instructed to promptly switch any funds obtained in PIA’s accounts to the FBR’s treasury accounts.

Latest reviews point out that PIA has not filed returns since February, and a tribunal’s order requires the airline to promptly pay Rs2.77 billion. The freezing of accounts occurred two days earlier than the top of the month, deviating from the same old follow of such actions happening on the month’s final day.

It’s pertinent to say right here that final month, PIA confronted operational disruptions, together with flight cancellations and delays, attributable to unpaid dues to the state’s oil advertising firm, Pakistan State Oil (PSO). Studies from Bloomberg spotlight that PIA’s liabilities stand at Rs743 billion (roughly $2.5 billion), surpassing its complete property by 5 instances.

PIA sought extra borrowing of over Rs7 billion from banks amid considerations about potential flight operation suspensions amidst a extreme monetary disaster. The airline has approached the Aviation Division for quick loans, together with a government-guaranteed possibility for securing Rs7.5 billion.

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Pakistan’s cotton exports see a big rise this season, transport 125,000 bales



Pakistan has efficiently exported a minimal of 125,000 cotton bales, with prospects indicating additional enchancment in export volumes.

Notably, all export offers have been secured by a singular cotton ginner from Sindh, Dr. Jasso Mal, with locations together with China, Vietnam, and Indonesia.

It’s anticipated {that a} comparable amount of cotton bales shall be exported within the remaining length of the season. The present season marks a possible document, contemplating that cotton exports haven’t surpassed six digits since 2017-18 when the determine reached 207,424 bales. In distinction, the nation exported solely 4,900 bales in 2022-23, 16,000 bales in 2021-22, and 70,200 bales in 2020-21.

Ginners attribute this upswing in exports to the superior high quality of lint and favorable worldwide markets, drawing international consumers to Pakistani cotton.

Based on Cotton Ginners Discussion board Chairman Ihsanul Haq, the absence of typical rains in most cotton-growing areas has positively influenced crop high quality. Moreover, a big issue has been the document devaluation of the rupee, making native cotton extra aggressive on the worldwide stage.

Haq acknowledges that the potential document in cotton exports may need been greater if not for a decline in lint yield in Punjab on account of a extreme whitefly assault. Environmental air pollution has additionally negatively impacted the business.

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Senate committee sad with SBP’s probe into Rs70bn photo voltaic panel rip-off



The Senate Standing Committee on Finance expressed its dissatisfaction with the State Financial institution of Pakistan (SBP) over its dealing with of the investigation into the trade-based cash laundering of over Rs70 billion by way of the import of photo voltaic panels.

The committee, chaired by Senator Saleem Mandviwalla, met on Wednesday to debate the problem for the third time, however discovered the newest report by the SBP to be insufficient and missing in new data or progress.

The committee members questioned why the SBP was not sharing the total particulars of the case, when the Federal Board of Income (FBR) had already established the proof of cash laundering by way of the duty-free imports of photo voltaic panels.

A consultant of the SBP advised the committee that the banks concerned within the case had been recognized and penalised, however didn’t disclose their names.

The committee members, together with PMLN’s Musadik Malik and Saadia Abbasi and PTI’s Mohsin Aziz, demanded that the SBP present the entire data and the names of the banks to the Senate panel.

Senators additionally identified that the cash laundering was a critical offence, particularly at a time when the nation was going through international change constraints and needed to limit important imports.

Mandviwalla mentioned he had been suggesting that the case ought to be referred to the Federal Investigation Company (FIA) for a radical probe, because the SBP was not giving a transparent image to the committee.

PMLN’s Malik mentioned the FBR and Customs authorities had revealed that 63 importers had laundered cash by way of over-invoicing of photo voltaic panels, however this was primarily based on an audit of solely 200 out of 450 importers. He mentioned the whole sum of money laundering could possibly be as excessive as $2.5 billion if all of the importers had been audited.

Customs officers reiterated their earlier stance that they’d began the investigation in October 2022 and located 63 importers concerned in over-invoicing of photo voltaic panels, which had been imported from China however funds had been routed to the UAE or Singapore. They mentioned the photo voltaic panels weren’t bodily examined by the customs as they had been duty-free objects and solely good declarations (GDs) had been introduced to the customs desks.

The FBR had reported that photo voltaic panels had emerged as a high-risk merchandise for over-invoicing and trade-based cash laundering as a consequence of their duty-free import standing and the absence of gross sales tax on native provide.

They mentioned the photo voltaic panels, which had been imported at Rs72.83 billion, had been bought within the home market at nearly half the value, i.e. Rs45.61 billion.

Customs officers mentioned they’d registered instances in opposition to the most important suspects, together with Rab Nawaz and his spouse of Shiny Star Firm, who had been now on bail. Senator Mohsin Aziz mentioned the Shiny Star had laundered round Rs40 billion by way of two banks.

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