POL sales hit 2-year high
The sales of petroleum oil products in Pakistan hit two-year high level of 1.7 million tons in October with high speed diesel (HSD) leading the rally from the front.
The overall sales increased 11 percent to 1.7 million tons in October compared to 1.52 million tons in September.
The growth in the sales may be attributed to revival of economic activities as large scale manufacturing sector ie fertiliser, cement and steel are showing gradual growth in production over the past couple of months.
The growth in overall sales is “backed by a sharp 43 percent sequential (month-on-month) increase in high speed diesel demand,” JS Research analyst Ali Zaidi said in a commentary.
Diesel sales stood at 0.67 million tons in October compared to 0.47 million tons in September. Diesel is mostly used by the commercial transport sector and partially by the agriculture sector. However, source of growth in the fuel remained unknown.
The sales of the fuel (HSD) had stood around current levels – 0.65 million tons – in the same month of the last year as well, according to oil sales numbers for October 2019.
Besides, the sales of petrol improved 7 percent to 0.69 million tons in October compared to 0.64 million in September. The fuel is largely consumed by motorcycle and car commuters. The sale of furnace oil, which is mostly used by oil-fired power plants, dropped 22 percent to 0.29 million tons during the month compared to 0.37 million tons in the previous month. The drop may be attributed to start of winter season when demand for power drops.
However, the strong demand for retail fuels (petrol and diesel) was more than sufficient to compensate for the 22 percent month-on-month decline in demand for the furnace oil, Zaidi said.
The consumption of furnace oil, however, remained higher in October due to the worsening gas crisis in the country during the month compared to the same month of previous year. This development encouraged the concerned authorities to replace gas-based power production with furnace oil. The sale of furnace oil surged 46 percent to 0.29 million tons in October compared to 0.2 million tons in October 2019.
Cement sales touch record peak in Oct
The cement sector has continued to post growth in the current fiscal year as monthly sales touched a record high in October 2020 when mills dispatched 5.735 million tons to consumers.
According to data released by the All Pakistan Cement Manufacturers Association (APCMA), domestic consumption of cement increased 15.83 percent to 4.859 million tons in October 2020 from 4.195 million tons in October 2019.
Exports registered an increase of 11.58 percent, going up to 875,266 tons in October from 784,433 tons in the same month of previous year.
Cement mills based in the country’s north dispatched 4.165 million tons to the domestic market in October 2020 compared to 3.605 million tons in October 2019, an increase of 15.53 percent. Exports from the northern region came in at 0.283 million tons, higher by 8.54 percent against exports of 0.261 million tons last year.
There was also positive growth in sales of cement mills based in the southern region, whose domestic dispatches increased 17.70 percent to 695,221 tons in October 2020 from 590,690 tons in October 2019. Exports from the southern region continued to grow and rose 13.09 percent to 591,877 tons in October this year from 523,353 tons in October 2019.
Govt provides relief for trade sector
The government has taken several policy initiatives to provide relief for the trade sector in order to reduce the impact of Covid-19 pandemic, said National Tariff Commission (NTC) Chairperson Robina Ather.
While these initiatives had been based on past learning and evidence, the capacity of using research and evidence in the public sector needed to be enhanced for more impactful measures, she added while speaking at a dialogue on “How evidence on Covid-19 is being used to support the trade sector?” on Wednesday.
“We need to develop in-house capacity for the use of evidence but the lack of financing for such measures has been a major constraint.”
Govt unveils rolling spectrum strategy 2020-23
The Government on Wednesday unveiled the Rolling Spectrum Strategy 2020-2023 in order to assist commercial telecom operators in network planning and investments owing to a massive growth in data utilisation.
According to a report titled “Rolling Spectrum Strategy 2020-2023”, released by the Pakistan Telecommunication Authority (PTA), the spectrum master plan provides a future roadmap for spectrum allocation as well as spectrum-related policy reviews that are anticipated to take place between 2020 and 2023.
The report, which outlines salient features of the strategy, will assist the Ministry of Information Technology and Telecommunication, PTA and Frequency Allocation Board (FAB) in formulating the three-year Rolling Spectrum Strategy – which was a key area highlighted in the Telecommunication Policy 2015. At present, there are over 9.4 billion global mobile connections, which exceed the total world population by a wide margin, revealed the report.
Ministry suggests choices to settle debt
Amid warnings of a massive oil and gas shortage, the Petroleum Division has proposed a comprehensive package to the Economic Coordination Committee (ECC) as it seeks settlement of circular debt worth Rs1.6 trillion in the energy chain.
At present, oil and gas companies are facing financial collapse, which may lead to disruption in oil and gas supply across the country.
Pakistan State Oil (PSO), Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL) and Pakistan LNG Limited (PLL) are the entities mainly trapped in the Rs1.6-trillion circular debt.
Of the total debt, Rs1.08 trillion is the principal and Rs520 billion is the markup. The Petroleum Division has proposed the issuance of Sukuk (Islamic bonds) to cover the entire circular debt along with some other measures. It proposed the settlement of gas development surcharge (GDS) payable by PPL on gas sales to Genco, against the amount receivable by PPL from Sui Northern Gas Pipelines Limited (SNGPL) while allowing SNGPL to settle its receivables from the government of Pakistan on account of GDS against the amount payable to PPL.
It proposed the adjustment of debt with equity in profitable public sector entities/ power projects/ companies in the energy chain.
Value addition chief to boosting exports to China
Business and industrial communities will have to focus on value addition in an effort to increase Pakistan’s exports to China, said Pakistan’s Consul General in Shanghai Hussain Haider.
Speaking at a webinar organised by the Karachi Chamber of Commerce and Industry (KCCI) on Tuesday, Haider noted that raw material and less value added products were currently being exported to China while there was immense potential for export of value added products as well. He added that in 2019, the top two products exported to China were copper and related articles, and cotton yarn and similar fabrics, which fetched $551.2 million and $351.95 million respectively for the national exchequer.
On the other hand, exports of value added products such as knitted apparel and woven apparel stood at $47.49 million and $31.38 million respectively, which clearly indicated that Pakistan’s exporters were primarily exporting raw material instead of value added products, he highlighted.
Economic coordination committee forms panel to settle debt
The federal government on Wednesday formed yet another committee to settle Rs1.6 trillion circular debt after the Petroleum Division warned that power and gas supplies across the country may be disrupted due to near bankruptcy situation of companies.
The Economic Coordination Committee (ECC) of the cabinet, which decided to constitute the committee, also allowed the reduction of Rs1.5 billion subsidy budget and diversion of the amount to clear liabilities of the Ministry of Religious Affairs and National Accountability Bureau (NAB).
Under the chairmanship of Finance Adviser Dr Abdul Hafeez Shaikh, the ECC approved the import of another 320,000 tons of wheat at a price of $286.2 per ton. It was $6 cheaper as compared to the previous deal of 320,000 tons agreed with Russia under a government-to-government contract.
The ECC formed a committee with all the relevant stakeholders for proposing modalities for clearing the circular debt of the Petroleum Division, according to a statement of the finance ministry.
Chinese assist sought for fruit export
The Pakistan-China Joint Chamber of Commerce and Industry (PCJCCI) has planned to invite multiple Chinese trade delegations with particular focus on export of fresh, processed and dry fruits from Pakistan.
Speaking at a session, PCJCCI President SM Naveed said,“Pakistan and China can collaborate for setting up fruit quality enhancement centres, processing units, dehydration plants and cold storage chains in order to process Pakistani fruits in line with international standards for export.”
Naveed stressed that Pakistan’s fruit sector had enormous export potential that could be beneficial for both countries. In that regard, he suggested the constitution of a preliminary research team in order to put ideas into action.
“We will soon invite Chinese delegations to Pakistan with focus on promoting export of fresh, processed and dry fruits from Pakistan, which will be re-exported to the rest of the world after value addition through the Chinese processing and packaging technology,” he revealed.
PCJCCI Senior Vice President Daud Ahmed stated that Pakistan produced a wide variety of fruits and vegetables, with annual production estimated at 9 million tons.
“This includes 990,000 tons of citrus fruit, 439,000 tons of mangoes, 526,000 tons of apples, 127,000 tons of guavas, 1.914 million tons of apricots and other fruits – bananas, grapes, pomegranates, pears and dates.”
Centre, Sindh fail to break wheat rate impasse
The federal and Sindh governments on Wednesday could not agree on a new wheat support price as the PPP, which is in power in the province, is seeking an increase of nearly 43 percent to secure a better rate for its farmers given its strong voter base in rural areas.
However, the PTI, the ruling party in the Centre, wants to strike a balance between the interests of the farmers and the consumers as it has a strong presence in cities.
The PTI-led federal government has proposed a price of Rs1,600 per 40kg, which is 14 percent higher than the current rate.
The Sindh government wants an increase of almost 43 percent and suggested a price of Rs2,000 per 40kg for the next crop.
A meeting between Sindh Chief Minister Murad Ali Shah and Finance Adviser Dr Abdul Hafeez Shaikh on fixing the minimum wheat price ended inconclusively.
“During the meeting, the finance adviser stressed the need for agreeing upon a well-coordinated support price to strike a balance between producers and consumers and ensure maximum productivity during the FY 2020-21,” read a statement issued by the finance ministry after the meeting.
“The finance adviser concluded that there is a need to look at a holistic picture for determining a minimum support price for the wheat crop, keeping in view, its financial implications in the long run,” it added.
But a senior official of the national food security and research ministry hoped that an agreement would be reached this week.
“The finance adviser has hinted at setting the price above Rs1,600 per 40kg subject to the condition that Sindh government also shows flexibility,” he added.
The finance ministry said the meeting was held virtually and the adviser exchanged views with the chief minister for a coherent wheat support price across Pakistan.
The current minimum wheat support price is Rs1,400 per 40kg, which the Economic Coordination Committee (ECC) of the cabinet approved increasing to Rs1,600 last month.
However, the federal cabinet did not agree to the price and asked the ECC to revisit the recommendation and also coordinate with the Sindh government that had announced a price of Rs2,000.