Category: Industry

Pakistan’s monthly petroleum consumption surged to an all-time high in October 2021, second only to the monthly sales of May 2018, amid growing economic activity and increasing oil prices. PSO posted the highest monthly sales, followed by SHEL.

In October of FY22, total petroleum sales (including lubricants) swelled to 1.99 million tons against 1.70 million tons in October FY21, posting year-on-year (YoY) growth of 17 percent. Among the POL products, high-speed diesel (HSD) made the highest contribution of 0.84 million tons, experiencing a YoY growth of 25 percent. This sales volume is the highest in any month of the current fiscal year and is second only to May 2018 figures.

According to Arif Habib’s petroleum report, this massive increase in sales volume is due to:

• Substantial increase in the demand for HSD in the agriculture and transportation sector.

• Boost in economic activity as businesses ramp up production due to increased local demand and higher trade activity.

• Significant increase in the sales volume of automobiles, posting a growth of 84 percent in the first quarter of the current fiscal year against the same period last year.

• Improved border management to curb the sales of smuggled fuel.

• Increased reliance on fossil fuel-based power plants for electricity generation.

Among the OMCs, PSO posted the highest sales, reporting year-on-year growth of 35 percent. SHEL sales figures grew by 22 percent in October 2021 against the same month last year. However, not all OMCs were able to increase their petroleum sales. APL and HASCOL sales declined year-on-year by 3 percent and 73 percent, respectively.

It is to be noted that petroleum sales increased even when POL prices reach historic highs.

Source: Pro Pakistani

The law minister, in a briefing session with the IMF, mentioned that section 46B (8) in the State Bank (Amendment) Bill breaches the constitution.

Talking through a video link, the minister highlighted the newly introduced provision which suggests that the central bank will be consulted on new legislation relating to the State Bank of Pakistan (SBP).

According to Farogh Naseem, the constitution only gives the right of legislation to the parliament and does not mention any consultation with the State Bank of Pakistan. Therefore, the new provision to consult the central bank before proceeding to legislation regarding the institution is a violation of the constitution.

Furthermore, the minister told the officials that the provision was likely to be turned down by the judiciary and the parliament as it clearly violates the constitution.

He moved on to Section 15(1) and declared it unconstitutional, mentioning that it is unauthorized to dismiss governors, deputy governors, or non-executive directors and external members of the Monetary Policy on the basis of misconduct. This can only be done through the approval of the Court of Law.

Farogh Naseem stated that this provision breached Article 25 which focuses on equality of citizens. The minister mentioned that the officials can be dismissed from their duties if proven guilty by the court.

The minister further went on to mention different Articles that the new provisions violated which included NAB Ordinance 1999, and FIA Act 1974.

Finally, the minister concluded that as the government does not have a two-thirds majority in the parliament, therefore, the constitution can not be amended. He further said that it would require several months for the bill to be legislated and therefore it is not possible to pass the bill before the 17th of December.

Source: Pro Pakistani

In pursuit of meeting IMF’s requirement, the government is struggling to privatize two RLNG-based power plants due to pandemic and accumulation of circular debt of Rs. 145 billion.

The Cabinet Committee on Privatization cleared two re-gasified liquefied natural gas-based power plants for a 100 percent sell-off in the coming two years. These are 1,233 megawatts Balloki power plant and 1,230 megawatts Haveli Bahadur Shah power plant. However, the privatization process lost its steam due to the pandemic. In the meantime, both power plants started accumulating circular debt, rising to Rs. 145 billion. The power plants had a circular debt of only Rs. 10 billion before March 2020.

“Now the government wants re-financing of debt of two RLNG plants but the commercial banks are reluctant to refinance the debt mainly because of accumulation of circular debt rising to Rs145 billion,” said representatives of banking sectors to a local news outlet.

In the last review with IMF, Pakistan has explained to the international money lender that economic uncertainty and the pandemic slowed down the country’s privatization drive. The government now aims to privatize the two power plants by the end of February in the current financial year. The government also informed IMF about initiating the privatization process of Pakistan Steel Mill (PSM) and Heavy Electrical Complex (HEC) as well.

To facilitate the sell-offs of these State-owned Enterprises (SOEs), the country is improving the transparency of the enterprises through special audits and publishing audit reports.

Source: Pro Pakistani

In the first four months (July-Oct) of FY22, Pakistan’s import expenditure more than doubled primarily due to investment-related imports. Exports also grew but were unable to contain the trade deficit. Consequently, the trade deficit also more than doubled during the same period of FY22.

The trade deficit more than doubled in the July-October period of FY2022, posting a rise of 104 percent to $15.525 billion against $7.617 billion for the same period in the last fiscal year. Similarly, in October 2021, the trade deficit swelled to $3.775 billion, a 109.4 percent increase compared to the same month in FY2021 where the deficit stood at $1.803 billion.

According to Commerce Ministry, in these four months (July-Oct) of the current financial year, imports grew by 64.5 percent to $24.994 billion as opposed to $15.193 billion for the same period last year. A similar trend was observed in Oct-21 as imports posted 60 percent growth ($ 6.246 billion) compared to the Oct-20 import figure of $ 3.907 billion.

One positive aspect of the growing trend in imports is that 40 percent of the growth is due to an increase in investment-related imports. Such imports reflect growing business activity in the country.

In the remaining 60 percent, petroleum, coal, and gas contributed 34% in import growth, while vaccines, food, consumer goods, and other imports contributed 11%, 8%, 2%, and 5% in import growth, respectively.

The net difference in imports was $9.801 billion between July-Oct FY22 and July-Oct FY21. A major chunk of $1.068 billion went in vaccine imports; $239 million in consumer goods, $823 million in food; $1.620 billion in capital goods; while $ 2.209 billion in raw material imports. Further, import receipts for petroleum, coal, and gas stood at $3.364 billion and miscellaneous imports stood at $478 million.

Another positive development that the Commerce Ministry reported is a record increase in exports. Though export growth was unable to contain the trade deficit, exports grew by 17.5% to $2.471 billion in October FY22, a record compared to previous years’ figures.

In the July-Oct period, exports grew to $9.468 billion compared to $7.576 billion in the same period of last financial year, posting a growth of 25%. According to analysts, if this trend continues, the government will cross the projected $28 billion export target for FY2022.

Source: Pro Pakistani

The National Bank of Pakistan (NBP) has reported a continuing successful operational recovery from the cyberattack on its systems that occurred on October 29.

According to details, NBP has confirmed that over 1,000 branches of the bank operated on Monday and delivered regular banking services by processing 800,000 transactions of over Rs. 286 billion. It said all ATMs were available for withdrawals by NBP clients with transactions of over Rs. 5 billion made by more than 200,000 clients.

This has been a significant achievement by the NBP team as the first day of the month is critical given the disbursement of salaries and pensions.

The NBP has expressed confidence that it will return to fully normalized operations over the rest of this week. The bank helpline (111-627-627) is available 24/7 to assist resolution of customer queries.

Source: Pro Pakistani

The State Bank of Pakistan (SBP) has rejected the news reports, circulating in various sections of media, of cybersecurity attacks on banks, including remarks attributed to Chief Spokesman, Abid Qamar. It was claimed in the reports that nine banks suffered cyberattacks and that the money was withdrawn and data was stolen.

The SBP has clarified that no bank, other than the National Bank of Pakistan (NBP), has faced any cyberattack, nor has any financial loss or data breach been observed. The central bank affirmed that it was closely monitoring the situation and would share any update or information about the incident through its official channels.

Last week, hackers reportedly targeted a section of the computer systems at NBP and caused disruption in payments for thousands of public sector employees.

The cyberattack disrupted NPB services throughout the country, prompting fears that the payment of salaries and pensions to public sector employees would be delayed. It was claimed that the NBP services to its customers were disrupted, and the bank was working with SBP to address the breach.

Source: Pro Pakistani