Tag: import

  • Oil industry warns OGRA of looming petrol, diesel shortage

    Oil industry warns OGRA of looming petrol, diesel shortage

    Due to limited imports and constrained domestic supplies, the oil industry has warned the government that the country may witness a shortage of petrol and high-speed diesel (HSD) in the upcoming days.

    The Oil & Gas Regulatory Authority (OGRA) has been written about the shortfall by the Oil Companies Advisory Council (OCAC), an organisation that represents the oil industry.

    The Oil Marketing Companies (OMCs) were given permission to import motor spirit/petrol and HSD in accordance with their demand in the product availability review of products for the month of November 2022, the OCAC stated. This decision followed considerable consideration.

    A shortage of 210,000 MT of HSD and 147,000 MT of gasoline was calculated during the product review. Due to restricted supply on the global market and extremely expensive premiums, it was noted at the meeting that HSD imports in November would be difficult. As a result, only PSO has so far reserved supplies from Flow Petroleum of 220,000 MT and 10,000 MT.

    Alarmingly, though, fuel import that corresponds to the expected sales volume and the stock cover has also not been scheduled. According to the OCAC letter, the importers were supposed to finalise the import plan, but as of now, there is a gap in the import plan.

    The conference with representatives from the industry held on November 1 also brought up this crucial issue, but no clear guarantees have been obtained in writing from the importing OMCs, it stated.

    According to Geo, the OMCs, who were expected to bring imports for use in October, got their shipments in the final week of the month; hence, the product wasn’t ready for usage during the month it was intended for. Similar to how OMCs who were permitted to import goods the month before for usage the following month had already used the shipments, the letter observed.

  • Pakistani rupee gains Rs2 to close at Rs221.94

    Pakistani rupee gains Rs2 to close at Rs221.94

    On Thursday, the Pakistani rupee (PKR) strengthened by Rs2 or 0.90 per cent against the dollar to close at Rs221.94.

    According to the Forex Association of Pakistan (FPA), the local currency was trading at Rs221.75 per $1 at 9:46 am, up 0.98 per cent from yesterday’s close of Rs223.94.

    The rupee has been strengthening since September 22, when it nearly hit an all-time low of Rs239.71. In the last nine sessions, it has increased by Rs15.77 or 6.58 per cent.

    The State Bank of Pakistan’s (SBP) and finance ministry’s joint investigation into banks making obscene profits from their dollar sales, according to Mettis Global Director Saad bin Naseer, has calmed the interbank market.

    SBP On Tuesday, Governor Jameel Ahmad told a National Assembly committee that eight banks were under investigation for the initial round of currency rate manipulation. In the following stage, the other banks would be looked into.

    He said that a smaller trade deficit in September and the Asian Development Bank’s (ADB) pledge of approximately $2.3–2.5 billion in aid were the key reasons for the rupee’s recovery on the open market.

    FAP Chairman Malik Bostan listed the ADB announcement and hopes of a sustained drop in imports as the factors that contributed to the rupee’s rise.

  • China wants to import donkeys from Pakistan

    China has expressed interest in importing donkeys and dogs from Pakistan, information provided to the Senate Standing Committee on Commerce has said.

    Senator Zeeshan Khanzada presided over the Senate Standing Committee on Commerce meeting on Monday in Islamabad.

    China plans to import dogs and donkeys from Pakistan, according to senators Dinesh Kumar and Abdul Qadir. China, according to Kumar, is a significant export market.

    Senator Qadir told the committee that the Chinese ambassador said his country wants to export beef because of a spike in local demand and a decrease in supply.

    Senator Muhammad Afridi suggested that animals be imported from Afghanistan and then exported to different countries as they are available on cheap rates there, but there are no purchasers.

    However, in response to this recommendation, the relevant officials stated that temporarily banning the import of animals from Afghanistan owing to the spread of lumpy skin disease.

    However, in response to this recommendation, the relevant officials stated that the import of animals from the country is banned due to lumpy skin disease.

  • Weekly inflation down 8.1% due to lower FCA, timely import of vegetables

    Weekly inflation down 8.1% due to lower FCA, timely import of vegetables

    Weekly inflation measured by the Sensitive Price Indicator (SPI) for the week ending September 22, 2022, decreased by 8.11 per cent.

    The year-over-year (YoY) trend shows a rise of 29.28 per cent, which is down around 11 per cent from the 40.58 per cent observed last week. The YoY rise stayed above 40 per cent during the previous five weeks, reaching an all-time high of 45.50 per cent.

    The price increase over the previous year was mostly brought on by an increase in prices of tomatoes (117.55 per cent), diesel (105.12 per cent), petrol (91.87 per cent), pulse masoor (75.38 per cent), pulse gram (73.55 per cent), mustard oil (65.64 per cent), cooking oil-5 litre (63.63 per cent), washing soap (61.50 per cent), vegetable ghee-2.5 kg (59.42 per cent), pulse mash (56.93 per cent), vegetable ghee-1 kg (56.09 per cent), onions (50.83per cent) and LPG (49.89 per cent), while decrease was observed in the prices of electricity for q1 (45.61 per cent), chilies powder (43.05 per cent), sugar (19.20 per cent) and gur (3.37 per cent).

    According to the most recent PBS data issued on Friday, the SPI for the week under review in the aforementioned category was recorded at 203.21 points compared to 221.14 points observed in the previous week.

    Out of 51 items, 26 items (50.98 per cent) saw price increases during the week, 10 items (19.61 per cent) saw price decreases, and prices of 15 items (29.41 per cent) remain unchanged.

    For the first quarter, power charges were among the items whose average prices decreased on a week-over-week (WoW) basis showing a decrease of 64.23 per cent.

    Other items which recorded a decrease include tomatoes (8.15 per cent), LPG (3.82 per cent), bananas (1.90 per cent), garlic (1.31 per cent), pulse masoor (0.99 per cent), cooking oil-dalda or other similar brand (sn), 5 litre tin each (0.78 per cent), onions (0.46 per cent), vegetable ghee-dalda/habib 2.5 kg tin each (0.34 per cent) and vegetable ghee-dalda/habib or other superior quality 1 kg pouch each (0.06 per cent).

    The general populace has been impacted by the heavy rains and flooding since they are lacking in basic commodities while supply lines for food products have been disrupted.

    On the other hand, timely imports from Iran and Afghanistan are accountable for the decrease in vegetable prices, particularly for onions and tomatoes.

  • PKR continues losing ground against dollar amid fears of widening trade deficit

    PKR continues losing ground against dollar amid fears of widening trade deficit

    In the interbank market during the first hours of trading on Monday, the Pakistani rupee was trading between Rs229 and Rs230 versus the US dollar.

    When intra-day trading began at 11:00 AM, the rupee was quoted at Rs229.88, depreciating by 0.31 per cent against the US dollar.

    The rupee had a terrible prior week, falling against the US dollar in the inter-bank market to close at Rs228.18 after losing value in each of the five sessions for a total loss of almost 4 per cent.

    In the interbank market during the first hours of trading on Monday, the Pakistani rupee was trading between Rs229 and Rs230 versus the US dollar.

    When intra-day trading began at 11:00 AM, the rupee was quoted at Rs229.88, depreciating by Re0.70 or 0.31 per cent against the US dollar.

    The rupee had a terrible prior week, falling against the US dollar in the inter-bank market to close at Rs228.18 after losing value in each of the five sessions for a total loss of almost 4 per cent.

    The dollar index, which compares the value of the dollar to six important rival currencies, held steady at Rs108.82, retreating from a two-decade high achieved on Wednesday. In the previous session, it fell to Rs108.35, its lowest level since August 30.

    Investors remain cautious ahead of Tuesday’s release of the US CPI data, despite the fact that Fed officials continued to use hawkish language on Friday, the last day before a period of silence prior to the Federal Open Market Committee’s meetings.

    A significant factor in currency parity, oil prices fell on Monday as the outlook for global fuel demand was overshadowed by COVID-19 limitations in China and the possibility of future interest rate increases in the US and Europe.

  • Govt imposes 100% penalty surcharge to release banned imported items

    Govt imposes 100% penalty surcharge to release banned imported items

    The federal government has approved the release of imported goods with a penalty surcharge of 100 per cent of assessed value that arrived at the ports after June 30.

    The federal government has reportedly permitted the release of all imported products and imposed fines of up to 100 per cent on goods that had arrived at ports by the end of July notwithstanding limitations.

    Finance Minister Miftah Ismail made the announcement during a news conference, noting that the restrictions were put in place in response to the International Monetary Fund’s (IMF) requirements.

    Vehicles, mobile phones, home appliances, and other property may now be released with a 100 per cent penalty surcharge.

    Other imported items were permitted with payment of a premium of up to 35 per cent, according to the announcement. Items received after June 30 and up to July 31 will be released with a penalty surcharge of 25 per cent.

    Three months after the limitation was put in place, the federal government earlier on August 18 relaxed the ban on the importation of luxury and non-essential goods.

  • ECC lifts import ban on goods except CBU vehicles, mobiles and appliances

    ECC lifts import ban on goods except CBU vehicles, mobiles and appliances

    The Cabinet’s Economic Coordination Committee (ECC) has decided to lift the import ban on all items other than completely built units (CBUs) of automobile, mobile, and home appliances and to permit the import of 200,000 metric tonnes of wheat.

    The increase in petroleum dealers’ margin from Rs4.90 per litre and Rs4.13 per litre, respectively, to Rs7 per litre was also approved at the meeting chaired by Finance Minister Miftah Ismail.

    The Pakistan Petroleum Dealers Association (PPDA), according to sources, has asked the government for an immediate revision of their margins due to inflation, increases in staff salaries and utility costs, etc.

    They have asked that the margins be revised to Rs6.90 per litre including 15 per cent profit (effectively Rs7.94 per litre). The PPDA then used the media to announce a nationwide strike that would begin on July 18, 2022, with the demand that their margins be increased to 6 per cent of the current selling price (effectively, Rs13.81 per litre for MS and Rs4.16 per litre for HSD).

    On the orders of the prime minister, Musadik Malik, the minister of state for petroleum, and Shahid Khaqan Abbasi, the former minister for petroleum, immediately began communication with the PPDA. On July 16 and 17, 2022, several rounds of negotiations took place in Karachi.

    During negotiations, the Secretary of Petroleum and the Chairman of OGRA both remained present. The PPDA changed its position during negotiations and requested that the margins be raised to Rs9.23 and Rs9.46/litre on MS and HSD, respectively, with immediate effect.

    The negotiating team acknowledged that a dealer with daily sales of less than 200,000 litres cannot operate the business profitably on current margins, and that such losses serve as a motivator for dishonest behaviour.

    After lengthy negotiations, the PPDA finally agreed to margins of Rs7 per litre for both MS and HSD. Based on this agreement and the promise that the revised margins will take effect in August 2022, the PPDA cancelled its call for a strike on July 18, 2022.

    The commitment made to the dealers in November 2021 is still less than this agreed-upon margin (4.4 per cent of sales price).

    The 4th international wheat tender for 2022, which was announced and opened on July 25, has prompted the Ministry of National Food Security and Research to ask for urgent advice. The Trading Corporation of Pakistan (TCP) issued its fourth tender on May 19, 2022, in order to secure 200,000 metric tonnes of imported wheat on a CFR basis, it was announced at the meeting.

    The ECC has approved the direct payment of $11.6 million as compensation/goodwill to the company M/s China Gezhouba Group International Engineering Co. Ltd (CGGC) through the Ministry of Foreign Affairs in response to a proposal from the Ministry of Water Resources for a compensation package for the Chinese casualties at the Dasu Hydro Power project.

    The ECC determined that the compensation/goodwill package’s amount, which is US$ 11.6 million, will remain the same as per the ECC’s earlier decision from January 21, 2022.

    it also approved the proposal to switch both the Fatima Fertilizer (Sheikhupura Plant) and Agritech plants to domestic gas on a summary moved by the Ministry of Industries and Production.

    According to the ministry, RLNG is provided to both SNGPL-based plants on a cost-sharing basis, and the gas rate for running these plants is calculated using a variable contribution margin (VCM).

    Both plants have asked the Ministry to revise the VCM and cap the GST at the price paid by the plants due to rising fuel prices and other factors. The proposal to switch both plants to domestic gas was approved by the ECC following discussion in accordance with the Federal Cabinet’s and ECC’s earlier decision.

    The Ministry of Petroleum, Ministry of Finance, Ministry of Food Security, and Ministry of Industries & Production were further instructed by the ECC to determine the gas price/VCM for the fertilisers The ECC also decided that sales tax could be applied to the actual gas cost that the company is paying.

    The Ministry of Commerce also provided a summary stating that the Cabinet approved the ban on the import of approximately 33 classes/categories of goods in order to reduce the current account deficit (CAD), which was on the rise.

    The decision caused an overall decrease in imports of the prohibited goods of over 69 per cent, or from $399.4 million to $123.9 million. Due to serious concerns expressed by significant trading partners regarding the imposition of the ban and taking into account the fact that the ban has had an impact on supply chains and the domestic retail industry, a review meeting was also held to review the ban after two months.

    The government’s ongoing efforts have resulted in a significant decrease in imports, so the ECC decided to lift the ban on imported goods other than auto, mobile, and home appliance CBUs.

    Additionally, all held-up shipments (aside from those that still fall under the banned category) that arrived at the ports after July 1, 2022, may be cleared with the payment of a 25 per cent surcharge.

  • Government will soon lift the import ban on certain items

    Government will soon lift the import ban on certain items

    The government will lift the import ban on some items in the upcoming weeks, according to Finance Minister Miftah Ismail, but restrictions for cellphones, cars, and home appliances will remain in place.

    He stated that the Commerce Ministry has sent a summary to the federal cabinet for removing restrictions on the import of non-essential and luxury items while speaking at a seminar about the performance of state-owned enterprises (SOEs) here in the federal capital.

    According to the finance minister, the decision was made in light of a lower import bill as a result of restrictions placed on the import of new machinery and raw materials, as well as lower oil prices on the global market. “In the upcoming months, we anticipate a decrease in petroleum product imports. Lower imports will enable Pakistan to conserve its foreign currency, he continued.

    He continued by saying he was hopeful for higher dollar inflows compared to outflows starting in the upcoming month, which would ease pressure on the local currency.

    “Imports in Pakistan as of July 25 were $3.758 billion and our total imports are likely to be $4.824 billion. This number will be less than our exports plus remittance”, he had written on Twitter a day earlier.

    The ban on 30 categories and 83 Customs headings was reportedly requested to be lifted by the finance minister on Tuesday to Prime Minister Shehbaz Sharif.

    He did, however, suggest that the Commerce Ministry keep the ban on completely built units (CBUs), cars, and home appliances in place.

    Speaking with Profit, sources said that between May 19 and July 19, 2021, Pakistan imported CBU automobiles, mobile phones, and home appliances worth Rs399 million. However, after the ban was imposed on May 19, 2022, the trend of importing these items decreased.

    Pakistan imported goods worth Rs123 million between May 19 and July 19, 2022, a difference of Rs276 million compared to the corresponding months of the previous fiscal year.

    It is important to note that the government has outright banned the import of cars, mobile phones, home appliances, dry fruits (aside from those from Afghanistan), crockery, shoes, chandeliers, lights (except energy savers), headphones, and loudspeakers.

    Some items on the list included condiments, doors and window frames, travel bags and suitcases, sanitary ware, fish and frozen fish, preserved fruits, tissue paper, furniture, shampoos, confectionery, luxury mattresses, and sleeping bags, jams and jellies, cornflakes, toiletries, heaters, blowers, sunglasses, kitchenware, aerated water, frozen meat, juices, pasta, ice cream, cigarettes, shaving supplies, luxury leather apparel, and musical instruments.

  • Oil sales fell by 11 per cent as prices rose to highest levels

    Oil sales fell by 11 per cent as prices rose to highest levels

    In June 2022, overall sales of petroleum and lubricants were 1.93 million tonnes, down 11 per cent from the previous month but unchanged from the previous year.

    Petrol and high-speed diesel (HSD) sales both experienced significant monthly declines, falling by 12 and 16 per cent, respectively.

    Sales of all oil products rose by 16 per cent YoY to 22.595 million tonnes during FY22 from 19.45 million tonnes during the same period in FY21.

    Analyzing the data demonstrates that expansion was seen in all categories, with offtake increasing to 8.95 million tonnes, 8.87 million tonnes, and 4.04 million tonnes, respectively, up by 9 per cent, 15 per cent, and 35 per cent on YoY compared to the same period last year.

    Ismail Iqbal Securities analyst Abdullah Umer stated, “We believe that significant rise in both diesel and petrol prices are the main reason behind the decline in retail sales.”

    According to the brokerage house, “Healthy economic activity, robust agricultural activity, upbeat automobile sales, and curb of HSD smuggling remained major drivers behind such stupendous growth.”

    Although the current government has chosen to manage petroleum product prices by levying a Petroleum Development Levy (PDL) and sales tax even if international oil prices decline, the brokerage house anticipated a further slowdown in diesel and gasoline sales going forward.

    In the coming months, retail fuel demand is likely to be further impacted by an increase in carpooling, increased use of public transportation, a change in consumer behaviour (moving from passenger cars to two-wheelers), high inflation, and a general slowdown in economic activity.

    “We expect RFO sales to remain intact due to a likely decline in RLNG & imported coal-based power generation.”

    The government announced a late-night price increase for petroleum products on Thursday, raising the ex-depot price of gasoline to Rs248.74 per liter (after an increase of Rs14.85) and diesel to Rs276.54 (after a hike of Rs13.23).

    Diesel was previously priced at Rs263.31 per litre and petrol at Rs233.89.

    The pricing structure included a Rs10 petroleum levy on gasoline. The cost of high-speed diesel, kerosene, and light diesel oil has also increased by Rs5 per litre.

    Finance Minister Miftah Ismail announced the government’s decision, stating that these prices would go into effect at midnight in order to make up for the Rs-230 billion loss experienced during the fiscal year that ended on June 30th, 2022.

    According to him, the country’s budget deficit, which reached a historic high of Rs5 trillion, made the increase in these prices inevitable.

  • Petroleum levy of Rs50 per liter approved in Finance Bill 2022–23

    Petroleum levy of Rs50 per liter approved in Finance Bill 2022–23

    On Wednesday, the National Assembly approved an amendment to the Finance Bill 2022 that will allow the government to increase the fuel levy to Rs50 per liter.

    During the National Assembly session held to discuss the amendments to Finance Bill 2022, Finance Minister Miftah Ismail made it clear that the amendment grants the government the authority to impose a tax of no more than Rs50 per liter. The levy will not be implemented instantly, he said.

    He went on to say that the levy had been temporarily kept at zero by the government. Throughout the upcoming fiscal year, the levy will be gradually implemented.

    According to The News, about 80 per cent of the amendments to the finance bill, according to State Minister for Finance and Revenue Ayesha Ghous Pasha, were tax-related.

    She emphasised that the government’s objective was to burden the wealthy while sparing the rest of us.

    The participants also agreed to impose a 5 per cent tax on the services of IT and software consultants in addition to the collection of sales tax through shopkeeper utility bills.

    Additionally, a change to revoke the salary class’s relief was approved. Individuals earning between zero and Rs600,000 annually would not be subject to income tax, per the initial budget proposals (where salary income exceeds 75 per cent of taxable income). The following slab would have had a nominal deduction of Rs100 per year (those earning between Rs600,000 and Rs1.2 million per year).

    With the new rates, those making between Rs0.6 and Rs1.2 million annually will now be required to pay 2.5 per cent in income tax.

    Furthermore, a 10 per cent super tax on 13 high-income sectors was approved by the National Assembly. The 10 per cent super tax on large industries was announced by Prime Minister Shehbaz Sharif on Friday in his “bid to relieve the general public of tax pressures.”

    “The revenue generated by this tax will be used to alleviate poverty in Pakistan, and it will be funded by high-income earners,” he said following a meeting with the government’s economic team.

    The tax will be levied on the cement, steel, sugar, oil and gas, fertiliser, LNG, textile, banking, automobile, beverages, chemicals, and tobacco industries. Later, Miftah Ismail, the finance minister, added airlines to the list, bringing the total to 13 sectors.

    Miftah went on to explain that the indirect tax (super tax) was intended to help the state accumulate funds under the heading of tax collection and reduce the budget deficit. He also stated that the fee was a one-time levy.

    The government’s proposed 1-4 per cent super tax on high-income individuals’ salaries was also approved by the National Assembly.

    The leadership levied a 1 per cent tax on those making up to Rs150 million annually, a 2 per cent tax on those making up to Rs200 million annually, a 3 per cent tax on those making up to Rs250 million annually, and a 4 per cent tax on those making up to Rs300 million annually.

    Additionally, a change was approved that imposes a tax on imported mobile phones that ranges from Rs100 to Rs16,000 depending on their value.

    Late Tuesday night, new amendments were added to the Finance Bill, 2022, including a potential reduction in the sales tax rate on the import of pharmaceutical raw materials from 17 per cent to 1 per cent, a tax exemption for theatres and production companies, and a change in the definition of “deemed rental income” by replacing the words “immovable properties” with “capital assets” and other changes.

    Under the revised Finance Bill 2022, the FBR also decreased the capital value tax (CVT) on vehicles from 2 per cent to 1 per cent.