Tag: shortage

  • Sindh govt’s Rs2 roti plan may trigger shortage, price inflation in the near future

    Sindh govt’s Rs2 roti plan may trigger shortage, price inflation in the near future

    Sindh Governor Kamran Tessori has announced a subsidised food programme for the poor. As part of this initiative, the government will provide roti (flatbread) at a price of Rs2.

    Tessori stated that the provision of roti at a reduced price is aimed at helping people affected by inflation and will be implemented in specific areas of the metropolis. He emphasised that this noble cause will be pursued as a mission.

    During a ceremony on Sunday, the governor announced the establishment of up to 300 tandoors (traditional clay ovens) across the Sindh capital, where roti will be sold for only Rs2. Additionally, he reiterated that ration bags would be distributed among one hundred thousand deserving families in the port city.

    While it may seem beneficial for the inflation-hit people of Karachi to have access to roti at a significantly lower price of Rs2 compared to the Rs20-25 market price, there could be unintended consequences.

    If the government sets up 300 temporary tandoors selling roti at Rs2, the majority of people may opt to buy from them rather than purchasing roti from tandoors selling it at a higher price. Consequently, the tandoors selling roti for Rs20 may be forced to close as they would be unable to compete with these subsidised tandoors.

    Once the government discontinues the cheap roti scheme or ceases to offer it at reduced rates, there is a potential for a shortage to arise. With only a limited number of tandoors available for citizens to purchase roti from, the scarcity could drive up the price of roti to Rs30 or even higher.

    This highlights the possibility that the government’s initiative of selling roti at a reduced rate may not be sustainable in the long run. The temporary availability of roti at Rs2 might not be as beneficial as initially perceived. Only time will tell whether this programme will provide temporary relief to the masses or worsen the situation.

  • Flour mill owners in Punjab threaten to suspend market supplies on February 14

    Flour mill owners in Punjab threaten to suspend market supplies on February 14

    The owners of flour mills have threatened to go on strike, halting supplies to the markets on February 14th, and are demanding that the Punjab food department immediately meet their demands.

    The Chairman of the Pakistan Flour Mills Association (PFMA) Punjab chapter, Chaudhry Iftikhar Ahmad Mattu, has issued a warning of a planned strike on February 14th if the provincial food department does not address their demands.

    During a press conference, the Chairman of PFMA Punjab Mattu criticised the inappropriate behavior and incorrect policies of the provincial food secretary.

    According to ARY News, the Chairman stated that the wrong policies of the food secretary have impacted the supply of flour, leading to the closure of multiple flour mills. He further announced that the flour mills will stop receiving wheat quota from the government starting from February 13th.

    In addition, Chaudhry Iftikhar Ahmad Mattu announced that the flour mills will cease supplies to the market on February 14th and proceed with a strike, unless their demands are promptly met by the Punjab food department. Meanwhile, the Karachi Dairy and Cattle Farmers Association declared its intention to raise milk prices by Rs20 per litre, effective from February 11th.

    In a statement from the Karachi Dairy and Cattle Farmers Association, the spokesperson attributed the price hike of milk to the increased cost of fuel and fodder. The official rate for milk has been set at Rs180 per litre, however, it is being sold for Rs190 in the city.

    With the increase, the price per litre of milk will rise to Rs210. The Commissioner of Karachi has recently ordered operations to seal dairy shops selling milk at elevated prices.

  • Punjab police seizes 1.3 million litres of illegally hoarded petrol in a crackdown

    Punjab police seizes 1.3 million litres of illegally hoarded petrol in a crackdown

    Pursuant to the warning issued by Petroleum Minister Dr Musadik Malik, the Punjab police initiated a crackdown against individuals engaged in the illicit stockpiling of petrol and diesel in several areas of the province, including Sheikhupura, Patoki, and Daska.

    The Inspector General of Punjab issued directives for strict enforcement against such practices and instructed that decisive action be taken against those found to be responsible.

    In accordance with the directives, police teams conducted raids on multiple fuel stations in Sheikhupura and Patoki, resulting in the recovery of over 1.3 million litres of petrol that had been illegally stockpiled by mafias. The contraband was found stored in underground tanks in warehouses, and over a dozen containers filled with gasoline were also seized.

    The District Police Officer, Zahid Marwat, reported that the value of the recovered gasoline exceeds 300 million rupees. He further stated that appropriate legal action, including the filing of charges, will be taken against those found to be responsible for the hoarding of fuel.

    On Wednesday, Minister of State for Petroleum, Musadik Malik, dispelled all rumors of a shortage of petroleum products in the country.

    According to ARY News, during a press conference held in Islamabad, the state minister stated that Pakistan has an ample supply of both diesel and gasoline. He issued a warning to those engaged in hoarding, stating that the government will revoke licenses for those found to be artificially creating a shortage of these products.

    The minister also sought to dispel any notion that the government is responsible for increasing the prices of petroleum products.

  • Can’t find your medicine? Pharmaceutical firms threaten to protest from January 5

    Can’t find your medicine? Pharmaceutical firms threaten to protest from January 5

    Pharmaceutical firms in Pakistan have threatened to start boycotts from January 5 after growing shortage of medicines and other life-saving drugs and to put pressure on the government to resolve the sector’s problems.

    After the federal government introduced policies to increase prices of raw material, several medicines including insulin, are now unavilable in markets.
    According to the Pakistan Drug Lawyer Forum President Noor Meher, 91% of raw materials used to create these medicines are imported to Pakistan. He said that stocks of new medicines are sitting at Karachi port and Lahore Dry Port, however government authorities are not providing clearance to deliver these to stores. Meher revealed that the dire situation has now pushed pharmaceutical workers to protest on streets to demand the government’s attention for the sector’s problems.

    In October 2022, healthcare organization GlaxoSmithKline (GSK) announced that it was shutting down the production of Panadol tablets, Panadol Extra Tablets and Cildren’s Panadol Liquid Range in Pakistan after suffering financial losses.

    In a letter to PM’s Principal Secretary Syed Tauqir Shah, the CEO of GSK Consumer Healthcare Pakistan, Farhan Haroon had written:

    “We are incurring heavy financial losses on the production of the entire Panadol range due to an increase in the price of their raw ingredients and in the absence of due approval by the federal government on the recommendation of Drug Pricing Committee of Drug Regulatory Committee of Pakistan. Due to these challenges, manufacturing of Panadol range on negative margins is unsustainable and despite exhaustive efforts of the company to mitigate the issue through dialogue, the situation is now beyond our control, compelling us to declare force majeure.”

  • S&P Global lowers Pakistan’s credit rating to CCC+

    S&P Global lowers Pakistan’s credit rating to CCC+

    Pakistan’s long-term sovereign credit rating was downgraded by S&P Global from “B” to “CCC+” to reflect the continuous deterioration of the country’s external, fiscal, and economic metrics.

    According to S&P, Pakistan’s already meagre foreign exchange reserves would continue to be under pressure through 2023 without a drop in oil prices or an improvement in international aid. The nation also faces significant political risks that could alter its future course of policies.

    According to the report, Pakistan’s economic and fiscal results are predicted to be negatively impacted by this year’s devastating floods, skyrocketing food and energy prices, and rising global interest rates, with refinancing issues over the medium term.

    The agency maintained its outlook at “stable”.

    With barely enough reserves to pay one month’s worth of imports, a dollar shortage, and a delay in its loan programme with the International Monetary Fund, Pakistan is in the midst of an economic catastrophe. Despite the payment of a $1 billion bond this month, long-term dollar bonds continue to trade at distressed prices, reflecting investors’ lack of confidence in Pakistan’s capacity to meet its international debt commitments.

    Following the terrible floods that hit the country earlier this year, Moody’s lowered Pakistan’s sovereign credit rating by one notch, from B3 to Caa1, citing heightened government liquidity and external vulnerability risks.

  • Pakistan seeks to import 1.5 million tonnes of petrol from UAE at a negotiated price

    Pakistan seeks to import 1.5 million tonnes of petrol from UAE at a negotiated price

    In an attempt to begin the process of signing an intergovernmental agreement (IGA), Pakistan will write to the United Arab Emirates this week. The country is looking for a government-to-government contract to import 1.5 million tonnes of gasoline annually.

    According to The News, Pakistan would import 1.5 million tonnes of motor spirit (Mogas) over a five to eight-year period, or 30 cargoes. The nation would receive two to three shipments from the gulf nation each month.

    The IGA with Oman, Qatar, Saudi Arabia, and some other nations has already been signed by the energy ministry. UAE will receive the same contract. Both nations will begin negotiating the GtG deal for the import of petrol, crude oil, and jet fuel once the agreement is finalised.

    Leading representatives from both sides agreed to sign a GtG agreement for the import of petrol, crude oil, and jet fuel at the Abu Dhabi negotiations held in the first week of the current month.

    This will enable Pakistan to have a sufficient supply of petroleum products.

    ADNOC (Abu Dhabi National Oil Company), on behalf of the UAE, and Pakistan State Oil (PSO), on behalf of Pakistan, will begin negotiations for a commercial deal on a going-to-market basis after the IGA has been finalised and signed.

    Before December 31, 2022, Pakistan wants both IGAs and business agreements signed so that beginning in January 2023, oil imports from the UAE could begin on a GtG basis.

    Under the terms of the GtG agreement, PSO obtains diesel from KPC (Kuwait Petroleum Company) and pays significant premiums for gasoline purchased on the open market, which is determined by the costs of goods on the global market.

    Now, as part of the GtG agreement, PSO would purchase gasoline from ADNOC at a negotiated rate. Additionally, because the nation’s refineries typically meet jet fuel needs, PSO would also import it as needed.

  • 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.

  • CNG stations in Punjab, KP to remain shut till March 2023

    CNG stations in Punjab, KP to remain shut till March 2023

    CNG stations in Punjab and KP will stop operating from November 2022 to March 2023 as the gas crisis increases as a result of the lack of required LNG during the winter.

    While the government is obligated to purchase 12 LNG cargoes each month, Pakistan LNG Limited (PLL) has been unable to do so; as a result, the country will only have 10 LNG cargoes available in December and nine LNG cargoes each month in the following months. Due to the decreased LNG import cargoes, gas utilities will be forced to limit the supply of gas to captive power plants by 50 per cent.

    According to Express, in Punjab and KP, there won’t be any LNG available for CNG stations during the winter. Due to insufficient local gas output, Punjab has also been experiencing a gas crisis.

    According to government officials, the Sui Northern Gas Pipelines Limited (SNGPL) system’s gas supply to the fertiliser sectors won’t be reduced. Due to the probable political reaction this would cause, the government does not intend to reduce supplies of gas for the household sectors, therefore there will always be a supply available.

    As instructed by the federal government, SNGPL has been providing Re-Gasified Liquefied Natural Gas (RLNG) to a number of subsidised industries, including domestic consumers, export-oriented businesses, and fertiliser producers.

    Government payments to SNGPL for RLNG subsidies are Rs199 billion as of this writing. SNGPL’s capacity to pay RLNG suppliers PSO and PLL has been severely hampered by the reduced pricing. The amounts owed to PSO and PLL are now Rs284 billion and Rs135 billion, respectively.

    The power industry pays in full, but because its receivables have grown to over Rs115 billion, payments to suppliers have been significantly delayed.

  • Fears of an energy crisis increase as Pakistan fails to clinch an LNG deal

    Fears of an energy crisis increase as Pakistan fails to clinch an LNG deal

    A tender for the acquisition of liquefied natural gas (LNG) that expired on Monday did not receive a single bid from any overseas suppliers, according to Pakistan LNG Limited (PLL), a wholly-owned subsidiary of Government Holdings Private Limited (GHPL).

    PLL originally issued an invitation for bids in August for 72 LNG cargoes to be delivered over a six-year term from foreign suppliers.

    According to PLL, bids were requested from reputable organisations to convey cargo on a Delivered Ex-Ship basis (DES) at Port Qasim, Karachi, and suppliers had until September 14 to submit their offers.

    “Bid documents shall be available from 10 August 2022 to 13 September 2022,” it said.

    Failure of an LNG contract in Pakistan contributes to the energy crisis

    The Pakistani procurement, which had an expiration date of October 3, saw no suppliers participate, according to PLL bid documents.

    According to the documents, the corporation was looking for one shipment each month for the six-year period.

    PLL was required by the Pakistani government to carry out the business of importing, buying, storing, supplying, distributing, transporting, transmitting, processing, measuring, metering, and selling natural gas, LNG, and re-gasified LNG. Each cargo was to have a volumetric quantity of 140,000m3, it added.

    For the timeframe of July through September, PLL sought worldwide suppliers to submit proposals for 10 LNG cargoes.

    By July 7, suppliers were invited to submit their bids. Each cargo was required to have a volumetric quantity of 140,000m3, according to PLL documentation.

    Bloomberg, citing traders with knowledge of the situation, said that the state-owned LNG purchaser did not receive any bids in a $1 billion LNG purchase tender at the time. The article at the time stated that “it highlights both the scope of the worldwide fuel shortage as well as the unwillingness of suppliers to sell to a country in the depths of an economic crisis.”

    The Russia-Ukraine conflict has caused supply chains to be disrupted globally, which has driven up the cost of key commodities like LNG.

    Pakistan, on the other hand, is experiencing a fuel scarcity, especially in the electricity sector. The most recent development is anticipated to worsen the energy situation, particularly during the winter when there will be an increase in heating demand that would affect both families and companies.

  • Pakistan to import vegetables from neighbouring countries to overcome shortage

    Pakistan to import vegetables from neighbouring countries to overcome shortage

    After devastating floods ravaged the nation, Pakistani officials made the decision to import onions and tomatoes from Iran and Afghanistan due to the rising prices and imminent food crisis.

    The production and supply of vegetables and other crops has been impacted by the recent torrential rains and flooding.

    At a meeting presided over by Commerce Minister Naveed Qamar, the Ministry of Commerce made the announcement. The minister also examined the country’s supply of tomatoes and onions.

    To address the nationwide demand for these crops, the session voted to facilitate the import of onions and tomatoes from Afghanistan and Iran.

    According to The News, the panellists predicted that there will be a tomato and onion shortage in the nation within the next three months. They also stated that because recent flooding has harmed crops, a shortage and price increase are anticipated.

    The News reports that the importation of tomatoes and onions will help to uplift their availability and maintain their pricing.

    The Ministry of Commerce would collaborate with the FBR and the Ministry of National Food Security, it was decided at the meeting. The session also resolved to request reductions in taxes and charges from the federal cabinet’s Economic Coordination Committee for imported tomatoes and onions.

    Earlier, Qamar had emphasised the importance of taking quick action to make tomatoes and onions available to consumers and to stabilise the skyrocketing costs of these commodities. Due to a lack of supply in the market as a result of recent floods, the price of onions and tomatoes has reached Rs 300 per kg.