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Islamabad refuses to cave in to international monetary fund demands

Talks between Pakistan and the International Monetary Fund (IMF) remained inconclusive after the global lender did not budge from its demand of increasing electricity tariff by Rs4.95 per unit and imposing taxes worth Rs150 billion.

For now, Islamabad has refused to accept both of these demands and instead Finance Minister Shaukat Tarin is set on Friday to reverse some of the adverse taxation measures that were part of the Finance Bill 2021 unveiled on June 11.

The minister will conclude the general budget debate and make new announcements.

Tarin may announce withdrawal of the Rs10 billion in taxes imposed on the salaried class, retaining the current sales tax rate on dairy products, plants, machinery and maize seed, and provision of some relief to the banking industry.

“The IMF Board meeting was on July 7, but we need more time for concluding the discussions,” the minister said on Thursday during a meeting of the National Assembly Standing Committee on Finance.

Government to consult, facilitate business community

The federal and Punjab governments have presented growth-oriented budgets for fiscal year 2021-22, said Punjab Finance Minister Makhdoom Hashim Jawan Bakht.

Speaking at a two-day post-budget convention of the All Pakistan Chambers on Thursday, he highlighted that Punjab earmarked Rs560 billion for development programmes in the provincial budget, which was 66% higher than the previous budget.

He assured convention participants that the government believed in holding prior consultation and facilitating the business community.

“The provincial government will continue to aid traders by ensuring tax relief and incentive packages for various sectors of the economy, especially the export-oriented sectors,” he said. “The Pakistan Tehreek-e-Insaf (PTI) government is paying attention to human resource development and a number of solid steps have been taken for public well-being.”

He announced that the government was in the process of introducing effective and comprehensive measures for infrastructure development.

Body set up to steer China-Pakistan economic corridor projects

The government has set up Pak-China Relations Steering Committee to remove hurdles in the execution of China-Pakistan Economic Corridor (CPEC) projects, underscoring that Islamabad has finally decided to give a push to the multibillion-dollar strategic initiative.

“In order to streamline and expedite coordination, finalisation and execution of CPEC projects, the prime minister has been pleased to constitute Pak-China Relations Steering Committee,” read an order issued by the PM Office on Monday this week.

The terms of reference and composition of the steering committee indicate that the government now seems serious about CPEC after putting the strategic initiative on the back burner.

The 15-member committee comprises representatives of the government, armed forces and intelligence agencies. This makes the body different from the Cabinet Committee on CPEC.

SBP reserves fall $311mn to $16.1bn

The foreign exchange reserves held by the central bank fell 1.89% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On June 18, the foreign currency reserves held by the SBP were recorded at $16,106.1 million, down $311 million compared with $16,417.3 million recorded on June 11.

According to the central bank, the fall came mainly on the back of external debt repayments.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $23,256.9 million. Net reserves held by banks amounted to $7,150.8 million.

Pakistan borrowed $2.5 billion through Eurobonds on March 30, 2021 by offering lucrative interest rates to lenders aimed at building the foreign exchange reserves.

Pakistan received the first loan tranche of $991.4 million from the International Monetary Fund (IMF) on July 9, 2019, which helped bolster the reserves. In late December 2019, the IMF released the second loan tranche of around $454 million.

Karachi residents suffer because of tussle between utilities

Residents of Karachi are suffering due to the fight between Sui Southern Gas Company (SSGC) and K-Electric, said National Electric Power Regulatory Authority (Nepra) chairman in remarks over delay in signing of a gas supply agreement between the two companies.

Nepra Chairman Tauseef H Farooqi, while presiding over a hearing on the quarterly tariff adjustment for K-Electric, expressed displeasure over load-shedding in the night in Karachi.

“We have asked you not to carry out night-time load-shedding in Karachi, then why are you doing it,” he asked. K-Electric has filed a petition seeking monthly fuel cost adjustment (FCA) for the period January-April 2021 and quarterly tariff adjustment for the quarter ended March 2021 under the Multi-Year Tariff 2017-2023.

In the petition, K-Electric requested Nepra to allow the collection of Rs7.174 billion from power consumers under the monthly FCA and with a tariff increase of Rs0.36 per unit under the third quarter adjustment. Nepra postponed the hearing on monthly FCA for January-April 2021 and will conduct the hearing on it along with the FCA for May and June 2021.

Pakistani nuclear scientists, institution bag international awards

In recognition of Pakistan’s advancement in the application of nuclear technology for achievement of Sustainable Development Goals (SDGs), the country’s scientists and an institution have been honoured with prestigious international awards in three categories.

The awards certificates will be presented during the International Atomic Energy Agency’s 65th General Conference in September 2021, according to a statement issued by the Foreign Office on Wednesday.

The IAEA and the Food and Agricultural Organisation of the United Nations (FAO) have jointly conferred the “Outstanding Achievement Award” on Pakistan’s Nuclear Institute for Agriculture and Biology (NIAB), it said.

The “Team Achievement Award” for work in the same area has also gone to a group of four scientists in the PAEC. The third award, “Young Scientist Award”, has also been bagged by a PAEC scientist for work in plant mutation breeding and related technologies.

PIA to obtain 4-airbus on dry lease

The Pakistan International Airlines (PIA) would obtain four new fuel-efficient aircraft this year under a business plan to improve the performance of the national-flag carrier, sources told on Wednesday.

The sources said that the new narrow-body planes would be obtained on 6-year dry lease, which would replace two old Boeing 777s. With the arrival of new Airbus 320 between July and December 2021, the fleet of the PIA would expand to 34, they added.

According to the sources, the first plane will reach the country in the middle of next month, while the second one would be inducted into the PIA fleet August. Two more planes would reach the country in October and December, they added.

The PIA Business Plan envisages addition of more than eight aircraft to the fleet of the national-flag carrier. The sources said that the PIA was buying new aircraft according to its business needs.

New oil refining policy probable to attract $15bn

An investment of $15 billion is expected to be poured into new and existing oil refineries for project upgrade and establishing a deep-conversion facility with refining capacity of 400,000 barrels per day (bpd).

The capital injection is likely in the wake of attractive incentives proposed by the government in the budget for fiscal year 2021-22.

The policy incentives will help the existing refineries to become financially sustainable and upgrade their plants, but they will only be eligible for the incentives if they commit to plant upgrade.

An investment of about $4-5 billion is expected to be made in project upgrade, which will enable the refineries to produce environment-friendly Euro-5 petrol and diesel.

“All incremental revenue due to policy incentives will go into a reserve account and can only be withdrawn for the purpose of upgrade,” said Pakistan Refinery Limited (PRL) Chief Executive Officer Zahid Mir said.

“The Oil and Gas Regulatory Authority (OGRA) will monitor project progress and in case of delay the incentives can be suspended.”

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