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Let there be crude; Pakistan, China ink petroleum sector settlement



A memorandum of understanding (MoU) has been signed by Pakistan Refinery Restricted (PRL) and the United Power Group of China (UEG). This settlement is about to escalate PRL’s refining capability from 50,000 barrels per day (bpd) to 100,000 bpd. The MoU was inked on the Third Belt and Street Discussion board in Beijing.

“Below the MoU, each events have expressed their mutual need to determine a strategic cooperation relationship,” states Zahid Mir, Managing Director & CEO of PRL. “This relationship is anchored in a shared curiosity in Pakistan’s power sector,” Mir provides. 

“Within the spirit of excellent religion,  each events will interact in earnest negotiations to discover potential alternatives for cooperation and collaborations. These alternatives embody fairness funding in PRL as a strategic investor, with sufficient board illustration, to improve and develop the refinery,” Mir elaborates additional. 

As soon as the brand new capability comes on-line, PRL will ascend to change into the third largest refinery in Pakistan, solely surpassed by Cynergico and Parco. At current, PRL holds the place of the smallest refinery in Pakistan, lagging behind Nationwide Refinery and Attock with a capability of fifty,000 bpd.

Why does PRL need to improve capability? 

PRL’s refinery improve plan — formally often known as the refinery enlargement and improve undertaking — dates again to 2021. The undertaking goals to rework the hydroskimming refinery right into a deep conversion facility. The transformation will dramatically curtail the manufacturing of excessive sulphur gas oil, whereas concurrently augmenting the manufacturing of commodities similar to Excessive-Pace Diesel (HSD) and Motor Spirit (MS/Petrol). The revamped complicated may even yield propylene, a feedstock for petrochemicals. The improve is scheduled for completion by September 2024.

Why does PRL need to broaden their refining capability?

Each two months, a gathering known as the Product Planning and Evaluate Assembly is convened.  This gathering brings collectively the Oil & Fuel Regulatory Authority, the Ministry of Petroleum, and all trade stakeholders: refineries, oil advertising and marketing firms (OMC), and huge state-owned shoppers of petroleum merchandise. Throughout this assembly, native consumption for the forthcoming two months is projected and juxtaposed in opposition to native manufacturing by refineries. Any demand not met by refineries is fulfilled by imports. Primarily, the Authorities legally ensures that refineries have clients.What do refineries must do? Merely exist and proceed refining.

Regardless of grappling with hovering costs and rampant inflation, Pakistan’s demand for refined petroleum merchandise is projected to escalate at a compounded annualised development charge of three%, reaching 682,970 bpd by 2032. A good portion of Pakistan’s petroleum merchandise — roughly 70% of petrol and 55%-60% of HSD — are imported. Why? Our refineries merely lack the capability to satisfy native demand. This situation supplies PRL with a sustained market and buyer base to faucet into. The one bottleneck to their gross sales is their refining capability.

Nevertheless, there’s extra to this than simply revenue. As the first shareholder of PRL by their possession of Pakistan State Oil, the Authorities of Pakistan has a vested curiosity in guaranteeing that as a lot of the projected 682,970 bpd demand by 2032 is met by native refineries, somewhat than by direct imports of petroleum merchandise.

“We have now ample room for refining domestically. Extra funding is required to bolster native refining capacities to scale back the refined product import invoice,” articulates Hassan Tahir, CEO of Hello-Tech Lubricants.

Projections primarily based on the present put in capability counsel that Pakistan’s home capability might be insufficient to satisfy native demand from 2023 to 2032. In consequence, Pakistan is anticipated to import petroleum merchandise averaging 389,000 bpd yearly over this era. 

The forthcoming enlargement of PRL is about to dovetail seamlessly with Cynergyico’s strategic pivot from a crude-to-fuel to a crude-to-chemical refinery. This metamorphosis presents a twin alternative: a commercially engaging proposition for PRL, and an opportunity for his or her principal shareholder to stem the tide of imports.

“We want merchandise like base oil for the manufacturing of lubricants, and polymer/resin for the native packaging of high-density polyethylene merchandise in Pakistan. There’s a substantial marketplace for such uncooked supplies, that are at the moment being imported,” Tahir clarifies.

“Upgrades are crucial for our oil refineries to fabricate merchandise that align with high-end OEM specs,” Tahir continues. “Owing to the non-availability of native uncooked supplies, most high-end industrial OEM merchandise are imported. As an illustration, semi-synthetic and absolutely artificial lubricants,” Tahir additional elaborates. 

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Particular audit of PSQCA initiated amidst alleged irregularities



ISLAMABAD: The Ministry of Science and Expertise (MoST) has formally requested the Auditor Normal of Pakistan (AGP) to conduct a particular audit of the monetary accounts of the Pakistan Customary and High quality Management Authority (PSQCA). This transfer comes as a part of an effort to uncover suspected irregularities and monetary embezzlements throughout the essential division.

In a latest assembly of the Senate Standing Committee on Science and Expertise, Secretary MoST, Ali Raza Bhutta, make clear the problems plaguing the PSQCA. He recognized the absence of a daily head and a weak Board of Administrators as main contributors to the group’s challenges. Moreover, the continued inner conflicts and the shortcoming of the director-general to make efficient administrative and monetary choices additional compounded the issues confronted by the authority.

To handle these points and streamline the affairs of PSQCA, the ministry is ready to suggest structural and administrative adjustments. These adjustments might be in alignment with the federal government’s initiative to reinforce the effectivity of state-owned enterprises (SOEs) below the SIFC umbrella.

In the course of the committee assembly, Secretary MoST knowledgeable that the ministry had compiled a complete report with the suggestions put forth by the committee. The pending promotions in PSQCA have been mentioned, with the secretary attributing delays to the absence of a daily Director Normal and interdepartmental disputes. 

The committee additionally deliberated on the prevailing Director Normal of Pakistan Hilal Authority, Akhtar Ahmed Bughio, discussing his time period extension and related advantages. Moreover, consideration was directed towards the restoration of Rs. 2.5 million in unjustified advantages from DG PHA, with an in depth report anticipated upon the conclusion of the investigation.

The committee, headed by Senator Sardar Muhammad Shafiq Tareen, expressed critical considerations about alleged illegal hirings and promotions on the PSQCA and different connected departments. The agenda included inquiry studies, authorized and administrative actions concerning unlawful recruitments and promotions, in addition to monetary irregularities in PSQCA.

The committee’s focus extends to the unlawful appointments of administrators, together with Ali Bukhsh Somro and Khalid Ahmed Bablani. The problems have been delivered to the committee’s consideration by a letter dated February 3, 2023, from the then Director-Normal of PSQCA, Dr. H. U. Khan, initiating an investigation into the alleged irregularities.

Along with PSQCA issues, the committee is ready to look at the efficiency of the Client License Wing, further fees associated to client licenses, particulars of officers’ international travels, and conferences over the previous decade. The Director Normal of PSQCA can be below scrutiny for holding a further cost, elevating considerations a few potential battle of curiosity.

The committee goals to deal with delays within the recruitment course of, pending promotions, and general efficiency points inside numerous departments below the Ministry of Science and Expertise.

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Nationwide Accounts Committee approves introduction of quarterly nationwide accounts at PBS



ISLAMABAD: The 107th assembly of the Nationwide Accounts Committee (NAC) convened on the Ministry of Planning, Improvement, and Particular Initiatives on Tuesday. The assembly accepted the introduction of Quarterly Nationwide Accounts (QNA) within the statistical system of the nation.

Chaired by the Secretary of the Ministry, the committee reviewed essential financial indicators, highlighting a notable restoration in Q1 2023-24, boasting a development of two.13% in comparison with 0.96% in the identical quarter of the earlier fiscal yr.

The Quarterly Nationwide Accounts (QNA) is sort of a detailed monetary snapshot of a rustic’s financial actions, compiled each three months. It’s a well-organized system that places collectively numerous data over this era, making a structured technique to analyze and mannequin the nation’s financial efficiency. 

One may consider it as a bridge between the broader Annual Nationwide Accounts (which cowl a complete yr) and shorter-term indicators that concentrate on particular points of the economic system. Basically, QNA gives a extra frequent and detailed take a look at the nation’s financial well being, making it a helpful device for understanding how issues are happening a quarterly foundation.

Initiated by the Pakistan Bureau of Statistics (PBS) after adopting a brand new base for nationwide accounts in January 2022, the event of Quarterly Nationwide Accounts concerned collaboration with the World Financial institution and a technical committee of nationwide consultants. The IMF included QNA compilation in its structural benchmark, emphasizing well timed dissemination.

Introduction of Quarterly GDP Methodology:

Subsequently, the NAC made historical past by approving the industry-wise methodology for compiling Quarterly GDP, overlaying the interval from Q1 2016-17 to Q1 2023-24, utilizing 2015-16 as the bottom yr. This step was taken to boost the accuracy and timeliness of financial statistics. Offering a extra nuanced strategy of taking a look at macroeconomic information.

Revised GDP figures and sectoral evaluation:

As per particulars shared by the planning ministry, the GDP for 2022-23 underwent a slight downward revision from 0.29% to -0.17%. The ultimate development fee for 2021-22 was additionally estimated at 6.17%, showcasing steady development in agriculture, improved industrial actions, and a notable enhance in providers.

The agriculture sector witnessed vital enhancements, with constructive revisions in essential crops regardless of challenges in sugarcane manufacturing. Industrial sector development, influenced by mining and quarrying, electrical energy, fuel, and water provide, confronted a decline resulting from challenges in large-scale manufacturing and development. The providers sector additionally skilled a decline attributed to varied components, together with transportation and storage, data & communication, finance & insurance coverage, public administration, and training.

Q1 2023-24 Estimates:

To fulfill IMF-SBA program benchmarks, PBS introduced revised GDP numbers for 2022-23 and Q1 2023-24 to the NAC on November 28, 2023. The committee accepted the QNA sequence, together with first-quarter estimates for 2023-24. Notably, a GDP development fee of two.13% was estimated for Q1 2023-24, with constructive contributions from agriculture, {industry}, and providers.

The NAC acknowledged the collective efforts of the Nationwide Accounts crew of PBS, Ministry of Finance, and State Financial institution of Pakistan in compiling revised GDP estimates underneath difficult circumstances. Whereas the launched GDP estimates meet IMF benchmarks, the annual figures stay topic to revision within the NAC assembly scheduled for Could 2024 because of the time-lag concerned in finalizing information for the final two fiscal years.

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Enterprise confidence on the rise as per Abroad Chamber of Commerce survey



ISLAMABAD: The Abroad Buyers Chamber of Commerce and Business (OICCI) has launched its newest Enterprise Confidence Index (BCI) Survey – Wave 24, unveiling a promising upswing in Pakistan’s enterprise confidence. Spanning from October to November 2023, the survey exhibits a seven % total enchancment in comparison with the earlier wave in March to April 2023.

The report signifies a optimistic shift in enterprise sentiments, with Pakistan’s total enterprise confidence standing at damaging 18 %, an enchancment from the damaging 25 % recorded earlier. The manufacturing sector witnessed the biggest enhance, rising by 9%, reaching -10% from -19%, adopted by the companies sector at -18% (in comparison with -26%). Though the retail and wholesale sector stays the least assured, it has proven enchancment of 4 share factors in comparison with the final survey.

Regardless of the optimistic momentum, over three-quarters of the respondents expressed issues about potential opposed results on their companies as a result of present financial state of affairs. Rising inflation, excessive taxation, and PKR devaluation topped the listing of recognized threats, according to the earlier wave.

Amir Paracha, President of OICCI, attributed the improved enterprise confidence to “comparatively steady macroeconomic indicators, favorable modifications within the political and financial panorama, supported by stability in FX charges and a document efficiency at Pakistan Inventory Change.” Key contributors to this optimistic development embody capital funding and the six-month enterprise outlook.

The excellent survey covers 9 cities and gathers suggestions from frontline enterprise stakeholders, representing nearly 80 % of the GDP. In Wave 24, 43 % of respondents had been from the manufacturing sector, 34 % from companies, and 23 % from retail/wholesale commerce.

Wanting forward, 41 % of surveyed respondents had a damaging outlook on Pakistan’s enterprise state of affairs within the subsequent six months (9 % lower than Wave 23), whereas 36 % expressed optimism. Notably, the BCI for randomly chosen OICCI members, representing international buyers, stood at a optimistic three %, a big enchancment from the damaging 19 % within the earlier wave, surpassing the boldness of non-members.

Wave 24 explores the longer term enterprise outlook, revealing that whereas new orders stay in damaging territory, the boldness index for growth plans improved by two %. Expectations for a lower in employment alternatives improved by two %, reflecting a extra optimistic enterprise atmosphere. Capital funding plans confirmed a big enchancment of twenty-two %, contributing to the general optimistic development in enterprise confidence.

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