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Category: Business

  • Pakistan places first order for discounted Russian crude oil

    Pakistan places first order for discounted Russian crude oil

    Pakistan has placed its first order for discounted Russian crude oil under a new deal negotiated between Pakistan and Russia, following months of discussions.

    State Minister for Petroleum, Musadik Malik, confirmed that one cargo will dock at Karachi port in May.

    Pakistan will only purchase crude oil, not refined oil, and imports are expected to reach 100,000 barrels per day if the initial transaction goes smoothly. Pakistan’s Refinery Limited (PRL) will initially refine the Russian crude, with other refineries to be included after a trial run.

    A delegation from Russia arrived in Pakistan earlier this month to discuss the payment mode. During these talks, the Russian side requested that the deal with Moscow be kept secret as they do not want the disclosure to other Russian crude buyer countries.

    Consequently, Pakistan’s top officials decided not to disclose the mode of payment and the exact discount. Russian Energy Minister Nikolay Shulginov led a delegation to Islamabad in January to hold talks on the deal, after which he said oil exports to Pakistan could begin after March.

  • Proposed cross-fuel subsidy plan fails to impress IMF, causing delays in bailout program

    Proposed cross-fuel subsidy plan fails to impress IMF, causing delays in bailout program

    In a bid to fulfil promises made to the International Monetary Fund (IMF), the Ministry of Finance is prepared to strongly oppose a draft summary proposed by the Ministry of Petroleum on the provision of cross-fuel subsidy.

    The proposed subsidy would involve increasing petroleum product prices by Rs75 per litre for all vehicles with engines of 1,000cc or more, in order to subsidize petrol for vehicles of 800cc and motorbikes. The draft summary was circulated among different ministries for comments before the upcoming Economic Coordination Committee meeting.

    An official from the finance ministry stated that the petrol scheme was still at the draft stage, and the ministry was preparing its comments and consulting with the IMF. The official recalled that a similar scheme had been proposed during the Pakistan Tehreek-e-Insaf (PTI) government but could not be implemented.

    Former finance minister Miftah Ismail had also allocated Rs48 billion on account of the Sasta Petrol Scheme in the last budget, but these resources were diverted towards flood-affected areas. The official added that such a scheme could not be implemented transparently in Pakistan, and the ministry would send its official comments soon.

    In March, Prime Minister Shehbaz Sharif announced the government’s plans for fuel pricing. While economists warned the decision could hinder a crucial IMF payout needed to prevent economic collapse, the government said that it was a scheme, not a subsidy.

    The IMF officials were quick to share that the Pakistani government did not consult the global lender on its petrol subsidy for low-income groups before the announcement. The Fund has asked the Pakistani authorities to provide more details about the petrol relief package causing more delay in the signing of the staff-level agreement.

    Pakistan has been trying to convince the Washington-based lender to release the next tranche of the bailout programme since the IMF funding stalled in November, hit by snags over fiscal policy adjustments after officials of the lender visited Islamabad in February for talks. They formed part of a ninth review exercise on a bailout package of $6.5 billion agreed upon in 2019 whose resumption is critical for Pakistan to avoid risking default on external payment obligations.

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  • IMF loan delay continues to impact Pakistani rupee

    IMF loan delay continues to impact Pakistani rupee

    During trading on Wednesday, the Pakistani rupee experienced a slight decrease against the US dollar, with a depreciation of almost 0.06 per cent in the inter-bank market. At around 12:45 pm, the currency was being traded at Rs284.06, which is a decline of Re0.16.

    This comes after the rupee had previously regained some ground against the US dollar on Tuesday, settling at Rs283.9 in the inter-bank market. The International Monetary Fund (IMF) Extended Fund Facility (EFF) has been stalled since last year, and market participants are waiting for its resumption.

    Experts have suggested that the reduced demand for US dollars can be attributed to the increase in inflows from workers’ remittances and a decline in import payments. Globally, the dollar saw some stability on Wednesday after being influenced by bond market volatility. Investors closely monitored US economic indicators, Federal Reserve commentary, and corporate earnings for indications about the path for interest rates.

    The dollar index, which measures the greenback against six major peers, rose by 0.11 per cent to 101.83 in Asian trading, following a 0.36 per cent decline on Tuesday that reversed the 0.54 per cent increase from the previous session.

    Oil prices, which serve as a significant indicator of currency parity, declined on Wednesday as the market considered potential interest rate hikes from the Federal Reserve. Such hikes could slow growth and dampen oil consumption, offsetting the impact of falling US inventories and strong Chinese economic data.

  • Dubai airport smashes pre-pandemic records with 16,713 flights in March

    Dubai airport smashes pre-pandemic records with 16,713 flights in March

    The Dubai International Airport has achieved a remarkable milestone by exceeding pre-pandemic levels in March, recording an impressive 16,713 flights. This marks a 23.7 per cent growth compared to March 2022, with an additional 248 flights added as compared to March 2019. The airport has seen a steady increase in flight movements, with a total of 48,418 flights in the first quarter of 2023.

    In a broader context, the main local airports in the UAE, including Dubai, Abu Dhabi, and Sharjah, have recorded an overall increase of 29.36 per cent in the first quarter of this year compared to the same period last year.

    The country’s national carriers, such as Emirates, Etihad Airways, Fly Dubai, Air Arabia, and Air Arabia Abu Dhabi, have accounted for approximately 74 per cent of the total number of flights through the airports in the region.

    This remarkable increase in flights can be attributed to the expansion of national carriers and the growing attraction of international airlines to operate from the UAE’s airports. The impressive surge in air traffic is a testament to the UAE’s status as a global aviation hub, continuing to attract a diverse range of airlines and passengers from around the world.

  • Pakistan shares plan with IMF to bridge $3 billion financing gap

    Pakistan shares plan with IMF to bridge $3 billion financing gap

    The coalition government of Pakistan has revealed its plan to the International Monetary Fund (IMF) for obtaining an additional $3 billion to fill the financing gap as it tries to persuade the lender to release the next loan tranche.

    In order to conclude talks with Pakistan regarding its delayed bailout, the IMF required “necessary” financing guarantees as soon as possible. Pakistan was asked to raise $6 billion in external financing, which is required by the country until June to avoid a potential default.

    This figure was determined on the assumption that the current account deficit would remain at around $7 billion in the current fiscal year. The IMF welcomed the recent announcement of financial support from key bilateral partners, but this support is inadequate for Pakistan’s requirements.

    Islamabad informed the IMF about its plan to secure a $450 million second Resilient Institutions for Sustainable Economy (RISE-II) budget support loan, as well as its plans to obtain $1 billion from the Asian Infrastructure Investment Bank (AIIB) and other commercial banks, and to materialise pledges made at the Geneva moot. According to sources, once the staff-level agreement is signed with the IMF, it will become easier for Pakistan to obtain financing.

    Pakistan’s foreign exchange reserves have fallen to cover barely a month of imports following the stall in IMF funding in November, which was later complicated by snags over fiscal policy adjustments after officials from the lender visited Islamabad for talks in February. The fiscal policy adjustments were part of the ninth review exercise on a bailout package agreed upon in 2019, whose resumption is crucial for Pakistan to avoid the risk of defaulting on external payment obligations.

    Pakistan will receive another disbursement of more than $1 billion from the IMF programme before it ends in June, which will unlock other bilateral and multilateral financings for the country, helping to ease its financial difficulties.

    Programme loans from other multilateral agencies await completion of the IMF review, as reported by central bank governor Jameel Ahmad during the spring meetings of the lender and the World Bank in Washington.

  • Alarming decline in Pakistan’s manufacturing sector, latest data reveals

    Alarming decline in Pakistan’s manufacturing sector, latest data reveals

    The manufacturing industry in Pakistan, which is responsible for about 20 per cent of the country’s economic growth, has experienced its eighth consecutive month of decline. This is a major cause for concern as it could have negative impacts on the overall economy.

    In February, the rate of decline was particularly severe, with a contraction of 11.59 per cent compared to the same period in the previous year, according to data from the Pakistan Bureau of Statistics.

    This decline will impact Pakistan’s overall economic growth, with the gross domestic product (GDP) also expected to suffer a significant blow this fiscal year.

    The negative growth of the sector is due to both domestic and global factors, including high energy costs, rupee devaluation, and the government’s tightening of monetary and fiscal policies. Industrial output fell by 5.56 per cent in the first eight months (July-February) of the ongoing fiscal year, compared to the same period last year.

    The global economic slowdown has further worsened the situation, with many businesses scaling back operations or reducing operating hours, while others have shut down their plants. The LSM sector has witnessed a decline in production from August 2022 to February 2023.

    All major and small sectors’ output contracted in February, including textile, food, coke and petroleum products, chemicals, automobile, pharmaceuticals, cement, fertilisers, iron and steel, furniture, leather products, electrical equipment, and non-metallic mineral products.

    To combat soaring inflation, the State Bank of Pakistan (SBP) also raised the discount rate to 21 per cent, hindering industrial activities by making bank financing more expensive.

  • Apple CEO Tim Cook to meet India’s PM Modi during store opening

    Apple CEO Tim Cook to meet India’s PM Modi during store opening

    Tim Cook, the CEO of Apple, is scheduled to meet India’s Prime Minister, Narendra Modi, and the country’s deputy IT minister as part of his visit to inaugurate the tech giant’s first retail store in India.

    Cook’s visit to Mumbai and New Delhi to open the first official company-owned outlets in the country highlights Apple’s growing interest in India, despite only having a 3 per cent market share.

    The company has been expanding iPhone assembly through contract manufacturers and increasing its exports. Cook will meet Modi on Wednesday in New Delhi, and he is also expected to meet India’s deputy IT minister, Rajeev Chandrasekhar.

    Apple and the IT ministry did not immediately respond to requests for comment, while Modi’s office declined to comment. Cook’s meetings with Indian officials come as Apple focuses more on India, which is the world’s second-largest smartphone market.

    According to data from the India Cellular and Electronics Association, iPhones accounted for more than 50 per cent of the $9 billion worth of smartphones exported from India between April 2022 and February 2023.

    On Monday, Apple opened its first store in Mumbai, but only for a private event where bloggers and tech analysts reviewed the store layout and design. The Mumbai store is located in the Reliance Jio World Drive mall, which is home to luxury clothing and jewellery brands like Michael Kors, Kate Spade, and Swarovski. It is 20,800 square feet, far larger than the planned Delhi outlet, according to local registration documents.

    Apple has sold its products in India through resellers or e-commerce websites such as Amazon. The Mumbai store will open to the public from Tuesday, while a second store will be inaugurated inside a New Delhi mall on Thursday.

    In India, iPhones are assembled by three of Apple’s contract manufacturers – Foxconn, Wistron Corp, and Pegatron Corp. Apple plans to assemble iPads and AirPods in India as well.

  • Affordable bus service between Islamabad and China to start soon

    Affordable bus service between Islamabad and China to start soon

    A bus company in Pakistan has announced its decision to launch a private bus service between Islamabad and Tashkurgan, a city in China, following Eid-ul-Fitr.

    According to a spokesperson for the company who spoke to Gwadar Pro, the service will commence on 13th May 2023, with the first phase involving the deployment of a mini-Utong bus capable of accommodating 28 passengers.

    The journey, including the immigration process, is expected to take approximately 38 hours, with passengers staying overnight at the Sost border. The fare for the journey is estimated at Rs60,000.

    To travel, individuals must have an original passport and copy, a valid original visa with its copy, and an invitation to China (visa category).

    The service is available to all, including tourists and those travelling for business and official purposes. Given the service’s popularity, the company plans to expand it to cater to the needs of the people of both countries.

  • Transporters overcharge passengers after fresh increase in fuel prices

    Transporters overcharge passengers after fresh increase in fuel prices

    The recent hike in petroleum prices has been met with public outcry, with many stating that the significant increase in petrol prices has severely impacted the common man, as transporters have raised fares just ahead of Eid-ul-Fitr. This rise in oil product prices is also expected to have repercussions on the cost of daily commodities, particularly kitchen items.

    The Statistical Department of Pakistan has reported that people were already facing 44.6 per cent inflation, and the weekly report showed that this figure was expected to increase further with the recent hike in petroleum prices. The price of petrol has been raised to Rs282 per litre, while high-speed diesel and light diesel oil rates will remain stable at Rs293 per litre and Rs174.68 per litre, respectively. However, kerosene oil has seen an increase of Rs5.78 per litre, with its price now standing at Rs186.07 per litre.

    Long route transporters have increased fares by 10 to 20 per cent per ticket, while freight services charges have risen by 30 per cent. Over 70 per cent of people have started to travel to their native towns to celebrate Eid-ul-Fitr with their families, and they have protested against the sitting government for the fresh increase in petroleum prices. The business community has also warned of a new wave of inflation, and the Pakistan Oil Tankers Association and All Pakistan Truck and Trailer Association have rejected the hike in petroleum product prices.

    Local transporters have also increased fares without permission, claiming that there is no government in the country. However, the District Regional Transport Authority (DRTA) Secretary has stated that they have started a crackdown against transporters who are overcharging passengers. The senior representatives of the trader’s community have also rejected the present hike in petroleum prices and have advised political parties to work together to boost the country’s economy.

    The All Pakistan Clerks Association (APCA) has stated that they are facing difficulties due to the government’s wrong policies and have decided to start a revolution after Eid-ul-Fitr against the wrong government policies. Wagon owners and drivers have protested at the termination points of their routes, while public transport operators in the Rawalpindi division will be meeting to discuss the situation. In summary, transporters, traders, and the general public have strongly reacted to the recent increase in fuel prices.

  • Pakistan sees increase in LPG prices following petrol price hike

    Pakistan sees increase in LPG prices following petrol price hike

    The Oil and Gas Regulatory Authority (OGRA) has announced an increase in the price of Liquefied Petroleum Gas (LPG) in Pakistan, following the recent hike in petrol prices. As per the notification, the price of LPG has been increased by Rs10 per kilogramme, with the new price per kilogramme set at Rs229.

    Moreover, the price of domestic and commercial cylinders of LPG has also been raised. The price of a domestic cylinder has been increased by Rs120, whereas a commercial cylinder will now cost Rs450 more than the previous rate.

    In addition, the federal government recently increased the petrol price by Rs10 per litre for the next two weeks. During a televised speech, the finance minister explained that the hike was due to the rise in international petroleum prices and exchange rate fluctuations.

    As a result, the new petrol price has been fixed at Rs282 per litre, while the rates for high-speed diesel (HSD) and light diesel oil have remained unchanged at Rs293 per litre and Rs174.68 per litre, respectively.

    Furthermore, the government has also raised the price of kerosene oil by Rs5.78 per litre, pushing it up from Rs180.28 per litre to Rs186.07 per litre.