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OCAC asks reimbursement of PDC to keep away from disruption in gas provide



The Oil Corporations Advisory Council (OCAC) has requested the Petroleum Division to reimburse billions of rupees price Worth Differential Claims (PDC) of Oil Advertising and marketing Corporations (OMCs), and refineries ostensibly in an effort to make sure the power safety of the nation.

Elevating critical considerations relating to PDC on gas costs, OCAC, in a letter to the Secretary Petroleum Division dated Might 9, 2022, has requested for the reimbursement of billions of rupees price Worth Differential Claims (PDC) of OMCs and refineries.

In line with the OCAC, the present PDC on diesel stands at Rs73 per litre and on petrol it’s Rs30 per litre which represents a 109 per cent and 26 per cent improve respectively, versus the PDC charges within the 2nd fortnight of March 2022.

“This exorbitant improve has severely impacted the oil advertising and marketing and refining sector’s money flows and its capacity to fulfill important monetary/working capital obligations,” mentioned OCAC.

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Regardless of varied assurances, the federal government has not eliminated the subsidy on costs of petroleum merchandise and on the present charges, the fortnightly influence for the trade is anticipated to exceed Rs57 billion through the present fortnight. Moreover, based mostly on the present worldwide costs, the PDC is anticipated to additional improve within the coming fortnight, mentioned OCAC letter.

In line with sources, roughly Rs76 billion are required to cowl PDC for the second fortnight (Sixteenth-31st) of Might 2022 whereas complete pending PDC of the oil trade is round Rs143 billion because the ECC has up to now not accepted any quantity for steadiness of April and Might PDC. They mentioned that if the federal government delays in clearing the pending quantity of PDC then the complete oil trade and gas provide chain of the nation will collapse and the power safety of the nation might be in danger. They mentioned the worth of greenback towards Pak foreign money is growing with every passing day whereas the restrict of letter of credit score (LC) is exhausting so the complete provide chain of the nation is at critical threat, mentioned sources.

It’s related to notice that the oil advertising and marketing and refining sector has continued to help the federal government because the imposition of the PDC regardless of a number of challenges. Nevertheless, the present subsidy ranges and restoration mechanism have develop into unsustainable and want speedy rectification.

On behalf of the oil trade (OMCs, refinery), OCAC in its letter additionally mentioned,” We wish to stress that the federal government instantly relieve the oil advertising and marketing corporations and refineries of the gas value subsidy burden to allow our provide chain to operate easily.” And, in case the elimination of subsidy shouldn’t be attainable, OCAC has additionally warned the federal government to take sure actions on speedy foundation to make sure uninterrupted gas provides, saying in any other case provide disruptions on a nationwide degree can be inevitable.

As per OCAC letter, the PDC restoration cycle must be shortened from the fortnight to weekly foundation as this step will assist in easing out the substantial money move and dealing capital constraints of the nation. Equally, in an effort to handle the burden of oil trade following introduction of PDC regime, monetary expenses on PDC (1% of the PDC price) have to be included within the value as PDC regime has burdened the oil trade with further expenses as the present monetary value to the trade is roughly 1%.

As per sources within the oil trade, the federal government had cleared a PDC of Rs31.73 billion up until thirty first March 2022. Equally, it transferred an quantity of Rs40 billion on account of PDC allotted for 1-15 April, 2022 which additionally features a deficit of Rs2.31 billion from 16-31 March, 2022. Moreover, the PDCs for the second fortnight of April might be submitted through the first week of Might, 2022, mentioned sources.

They added that PDC of solely Rs28.3 billion was pending with the federal government which must be deposited within the project account with Pakistan State Oil (PSO).

It’s pertinent to say that the Petroleum Division, in a letter dated April 25, 2022 to DGPR (SO), Karachi, has conveyed that the President had sanctioned the location of an quantity of Rs40 billion within the project account referring to reimbursement of PDC of OMCs and refineries as ceiling for the months of March and April 2022 of the present monetary 12 months 2021-22.

Requesting the DGPR (SO) to advise the Supervisor, NBP, Most important Department Karachi to rearrange funds towards the above talked about ceiling of Rs40 billion, petroleum division additionally sought that cost must be made on the receipts of cheques and prescribed schedule of cost duly signed by the authorised signatories of the account.

Earlier, the federal cupboard’s financial coordination committee (ECC) on seventh March, 2022 accepted the process for making PDC cost to OMCs and refineries ostensibly to keep away from the scarcity of petroleum merchandise within the nation. The ECC additionally accepted a particular PDC cost process to pay the PDC speedily, and accepted opening of a particular project account with Pakistan State Oil (PSO) for withdrawal of PDC by PSO for its personal claims and issuance of PDC claims to the opposite OMCs and refineries.

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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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