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Author: Mrs. Anjum Shahnawaz

Mari Petroleum discovers gas in Sindh

KARACHI: Mari Petroleum Company Limited (MPCL) on Monday announced discovery of gas from its exploratory well Hilal-1, drilled in Mari D&P Lease Area, located in Daharki, District Ghotki, Sindh.

Hilal-1 was spud-in on April 21, 2020 and drilled down to the depth of 1,202m into Sui Main Limestone(SML).

The well was drilled with the objective to test the hydrocarbon potentials of SML and Sui Upper Limestone (SUL).

The Drill Stem Tests (DSTs) carried out in SUL Formation flowed gas at a rate of 11 MMSCFD at wellhead flow pressure (WHFP)of 887 Psi at 48/64 inch choke size after acid job.

While DSTs carried out in SML Formation also successfully flowed 6.88 MMSCFD of gas with 132 barrels per day of water at WHFP of 804 Psi at 40/64 inch choke size subsequent to acid job.

It is highlighted that this is the 5^th consecutive new discovery in Mari D&P Lease Area based on 1,079 sq.km carpet 3D seismic survey of the area in 2015, which was followed by an extensive drilling program.

July 20, 2020
Pakistan’s oil, gas import bill plunges by 28 percent in FY20

ISLAMABAD: Country’s import of oil and gas fell sharply by 28 percent during fiscal year 2019/2020 owing to significant decline in international prices.

The import of petroleum group has decline to $10.42 billion during fiscal year 2019/2020 as compared with $14.44 billion in the preceding fiscal year, according to data released by Pakistan Bureau of Statistics (PBS).

Industry sources explained that the slump had been observed in terms of value due to significant decline in international oil prices.

During the year the international oil prices were remained lower due to conflict between Russia and Saudi Arabia.

The Russia–Saudi Arabia oil price war of 2020 is an economic war triggered in March 2020 by Saudi Arabia in response to Russia’s refusal to reduce oil production in order to keep prices for oil at moderate level. This economic conflict resulted in a sheer drop of oil price over the spring of 2020.

Reportedly, on March 08, 2020, Saudi Arabia initiated a price war with Russia, facilitating a 65 percent quarterly fall in the price of oil.

Unofficial reports suggested that in the first few weeks of March, US oil prices fell by 34 percent, crude oil fell by 26 percent, and Brent oil fell by 24 percent.

The price war was triggered by a break-up in dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over proposed oil-production cuts in the midst of the COVID-19 pandemic. Russia walked out of the agreement, leading to the fall of the OPEC+ alliance.

Oil prices had already fallen 30 percent since the start of the year due to a drop in demand. The price war is one of the major causes and effects of the currently ongoing global stock-market crash.

Pakistan’s import of retail petroleum products fell by 24.54 percent to $4.74 billion during fiscal year 2019/2020 as compared with $6.28 billion in the preceding fiscal year.

The imported quantity of the retail petroleum products, however, increased by 3.7 percent during the year under review. The quantity increased to 10.8 million metric tons during fiscal year 2019/2020 as compared with 10.42 million metric tons in the preceding year.

The import of petroleum crude even fell more sharply by 40.44 percent to $2.72 billion during fiscal year 2019/2020 as compared with $4.57 billion in the preceding fiscal year.

The import of Liquefied Natural Gas (LNG) has declined by 20.21 percent to $2.66 billion during fiscal year 2019/2020 as compared with $3.33 billion in the preceding fiscal year.

However, import of Liquefied Petroleum Gas (LPG) registered 17.63 percent growth to $294 million during fiscal year 2019/2020 as compared with $250 million in the preceding fiscal year.

July 20, 2020
Big retail units to be sealed till integration with FBR

ISLAMABAD: Big retail units shall be sealed till their integration with the online system of the Federal Board of Revenue (FBR) for sharing sales and purchases.

Sources in the Federal Board of Revenue (FBR) said that the big retail units are required to integrate their outlets with the FBR under Sales Tax Act, 1990.

However, those retailers who failed to integrate their outlets with the FBR would face punitive action as defined in the statute.

The sources said that through Finance Act, 2020 amendment has been made related to penalty for non-compliance for linkage of sales and purchase data with the FBR.

According to amendment made to Sales Tax Act, 1990, any person, who is required to integrate his business for monitoring, tracking, reporting or recording of sales, production and similar business transactions with the board or its computerized system, fails to get himself registered under the Act, and if registered, fails to integrate in the manner as required under law.

“Such person shall be liable to pay a penalty up to one million rupees, and if continues to commit the same offence after a period of two months after imposition of penalty as aforesaid, his business premises shall be sealed till such time he integrates his business in the manner as stipulated under sub-section (9A) of Section 3 or Section 40C, as the case may be.”

All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.

Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:

(a) a retailer operating as a unit of a national or international chain of stores;

(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;

(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;

(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers; and

(e) a retailer, whose shop measures one thousand square feet in area or more.

The FBR extended date for retailers to integrate their Point of Sale (POS) up to August 31, 2020.

The last date for integrating the POS for Tier-1 retailers was previously June 30, 2020.

The FBR said that only those retailers can integrate their POS by August 31 who submit their intention to RTOs/LTUs by August 20, 2020.

FBR sources said that the decision had been taken due to lockdown in the many parts of the country in order to prevent spread of coronavirus the business activities had become stand still.

The deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system. However, the date was extended in order to give opportunity to big retailers to make compliance.

July 19, 2020
Import of heavy electric vehicles allowed at 1 percent customs duty

ISLAMABAD: Federal Board of Revenue (FBR) has allowed import of heavy electric vehicles at one percent customs duty.

Through Finance Act, 2020 the duty at one percent has been made part of Customs Act, 1969.

According to the Finance Act, 2020 the imports of electric buses, electric trucks and electric prime movers have been allowed at one percent of customs duty and there is no condition attach to the imports.

However, imports of other electric vehicles including auto rickshaw, 3-wheeler loader and motorcycle have been allowed reduced duty rate at 50 percent of the prevailing tariff rate of customs duty as specified in the First Schedule to the Customs Act, 1969.

There are conditions attached to the imports of such motor vehicles. The FBR said that the concession shall be admissible for a period of five years with effect from July 01, 2020, on import of 10 electric vehicles (CBU – Completely Buildup Unit) of the same variant to the assembled / manufactured to the extent of maximum 200 units, to 2-3 wheeler segment, duly approved / certified by the Engineering Development Board (EDB).

The EDB shall monitor compliance with the EV Policy 2020 and intimate FBR immediately in case of violation by any manufacturer to stop further clearance at the concessional rate.

July 19, 2020
Pakistan mulls opening tourism spots by mid-August

ISLAMABAD: Pakistan is considering to open tourist spots across the country by mid of August provided that the COVID-19 situation was remained under control, said Special Assistant to Prime Minister of Pakistan Syed Zulfiqar Abbas Bukhari.
(more…)

July 19, 2020
Pakistan spends Rs217 billion on import of mobile phones in FY20

ISLAMABAD: Pakistan has spent Rs217 billion on import of mobile phones during fiscal year 2019/2020 amid slow economy and outbreak of coronavirus pandemic.

The import of mobile phones was Rs217 billion during fiscal year 2019/2020 as compared with Rs102.75 billion in the preceding fiscal year, showing 81 percent growth, according to data released by Pakistan Bureau of Statistics (PBS).

Market sources said that reduction in duty and taxes and restriction of registration with the Pakistan Telecommunication Authority (PTA) has increased the import of mobile phones through legal channels.

The import of mobile phones in terms of US Dollars also increased to $1.4 billion during the fiscal year under review as compared with $755.55 million in the preceding fiscal year.

Despite imposition of lockdown in the country to prevent coronavirus, the country imported mobile phones worth Rs38.2 billion in June 2020, which is 115 percent higher when compared with Rs17.78 billion in May 2020.

The market sources said that due to lockdown the importance of digital economy had increased. They said that financial transactions were being done through mobile phones, which were the easiest way.

July 19, 2020
Import of old, used motor cars falls by 55.41 percent in 2019-2020

KARACHI: The import of used and old cars massively fell by 55.41 percent during fiscal year 2019/2020 due to condition of payment of duty and taxes through foreign exchange imposed by the government.

The import of used and old cars in Completely Built Unit (CBU) condition fell to $99 million during 2019/2020 as compared with $222 million in the preceding fiscal year, according data released by Pakistan Bureau of Statistics (PBS).

The commercial import of used or old cars is not allowed under prevailing laws of the country. However, in order to facilitate expatriate Pakistanis the government allows incentives to bring cars into the country.

The Federal Board of Revenue (FBR) has allowed Pakistani nationals residing abroad including dual nationals can import old and used vehicles into Pakistan under these schemes: Personal Baggage; Gift Scheme; and Transfer of Residence.

The cars not older than three years and other vehicles not older than five years can be imported under these schemes, the FBR said.

These schemes were grossly misused in the past and bulk of imported cars brought into the country.

However, the ministry of commerce in February 2019 amended Import Policy Order, 2016 and made it mandatory for clearance of cars through foreign exchange, which should be certified by banks.

Since then the clearance of the cars has come to a standstill. Customs authorities said that a large number of imported cars were at the port but importer had failed to make payment as per procedure prescribed by the ministry of commerce.

However, later in a meeting of Economic Coordination Committee (ECC) decided to allow payment for duty and taxes for customs clearance of imported cars through local resources with condition that if foreign exchange becomes short due to currency fluctuations or change in duty and tax rates.

The overall import of CBU vehicles during fiscal year 2019/2020 fell by 43 percent. The import of heavy vehicles including buses and trucks has declined by 24.5 percent. While import of CBU motorcycles fell by 71.63 percent.

On the other hand the import of cars as Completely Knocked Down (CKD) condition also fell by 41.57 percent to $478 million during 2019/2020 as compared with $818 million in the same period of the last fiscal year.

Market sources said that massive depreciation in the local currency during past couple of years had increased the cost of local car manufacturers.

Further, the rates of locally assembled cars for end consumers also jumped up sharply.

These factors have reduced the productions of locally manufactured cars and subsequently reduced the import of cars in CKD condition.

The overall import of vehicles in CKD fell by 41.63 percent to $727.52 million during 2019/2020 as compared with $1.24 billion in the preceding fiscal year.

July 18, 2020
Weekly Review: market likely trade in green on housing sector activity

KARACHI: The stock market likely to trade in green owing to expected rise in demand of cement and steel in the wake of incentive provided to housing sector.

Analysts at Arif Habib Limited said that the market to remain green especially cyclical sectors to remain in the limelight including cements and steel due to government focusing on reviving economic activity through housing and construction sector.

That said, continuous slowdown in Covid-19 cases on daily basis is further improving investors’ confidence.

The benchmark KSE-100 of Pakistan Stock Exchange (PSX) is currently trading at a PER of 8.1x (2020) compared to Asia Pac regional average of 13.1x while offering a dividend yield of ~6.0 percent versus ~2.7 percent offered by the region.

The market commenced on a positive note, continuing the rally being witnessed since the last three weeks.

During the mid-week, 13 days winning streak came to an end as the index slipped by 66 points on account of profit taking.

Optimism in the bourse was sourced from: i) Capital injection from local investors as equities are being viewed as the preferred asset class, ii) Government planning to build low cost subsidized houses which rejuvenated investors’ interest in the cement sector, iii) State Bank of Pakistan has asked all commercial banks to allocate five percent of their portfolio to construction sector, again attracting interest in cements and iv) PM inaugurated construction works at Diamer Bhasha Dam that will increase demand for Cements and Steel.

Likewise, Commercial Banks performed well due to expectation of improved earnings in the upcoming results.

As a result, the KSE-100 index closed at 37,331 points, up by 1,140 points or 3.15 percent WoW.

Contribution to the upside was led by i) Cements (213 points), ii) Oil and Gas Exploration Companies (196 points), iii) Fertilizer (149 points), iv) Automobile Assembler (91 points), and v) Commercial Banks (55 points). Scrip wise major gainers were LUCK (85 points), POL (78 points), DAWH (77 points), PPL (75 points), and INDU (63 points). Whereas, scrip wise major losers were BAFL (13 points), NBP (9 points) ABOT (8 points), SYS (8 points) and COLG (7 points).

Foreigners offloaded stocks worth of USD 27.37 million compared to a net sell of USD 9.46 million last week. Major selling was witnessed in E&P (USD 20.40 million) and Fertilizer (USD 2.61 million). On the local front, buying was reported by Individuals (USD 15.93 million) followed by Insurance Co. (USD 14.29 million). That said, average daily volumes and traded value for the outgoing week were up by 22 percent and 34 percent to 426 million shares and USD 99.3 million, respectively.

July 18, 2020
FBR recommended imposing penalty for late return filing instead extending last date

ISLAMABAD: Federal Tax Ombudsman (FTO) has advised the Federal Board of Revenue (FBR) to impose penalty for late filing of income tax returns instead extending the last date.

The FTO in its annual report recommended that the FBR that instead of extending the last date for filing of Returns, late filing be allowed with certain penalty per month or any part of it, as it would be a more revenue-pro measure.

The FTO further recommended that in order to encourage increase in filing of Returns by employees of government and autonomous bodies, it was recommended that FBR to approach the concerned Authorities/Establishment Division to issue instructions to heads of government Departments, autonomous bodies and large scale public sector organizations for obtaining certificate of filing of Returns by their employees falling in the tax net, at the end of last date of filing of Returns, and link their promotions/increments to filing of Returns.

It was also suggested to devise mechanism in consultation with Securities and Exchange Commission of Pakistan (SECP) to ensure that business entities registered with SECP, who were non-filers, must file Income Tax Returns regularly.

It was also recommended that proper assistance to the Return filers be provided through establishment of facilitation centres at convenient places.

July 18, 2020
Annual foreign direct investment grows by 88 percent

KARACHI: Foreign Direct Investment (FDI) into the country registered 88 percent growth to $2.56 billion during fiscal year 2019/2020, State Bank of Pakistan (SBP) said on Friday.

The FDI posted $1.198 billion increase during the fiscal year under review as compared with $1.36 billion in the preceding fiscal year i.e. 2018/2019.

The inflows under the head of FDI grew by 18 percent to $3.285 billion during fiscal year 2019/2020 as compared with $2.78 billion in the preceding fiscal year. However, outflows recorded 49 percent decline to $724 million as against outflow of $1.42 billion in the preceding fiscal year.

The portfolio investment registered 32 percent contraction in outflows during the period under review. The outflows from the capital market recorded $281.7 million during fiscal year 2019/2020 as compared with the outflow of $415 million in the preceding fiscal year.

The total foreign private investment posted 140.7 percent growth to $2.279 billion during July-June 2019/2020 as compared with $947.2 million in the preceding fiscal year.

The foreign public investment in debt securities witnessed outflow of 241.3 million during fiscal year 2019/2020 as compared with $1 billion in the preceding fiscal year.

The total foreign investment including public and private rose to $2.038 billion during fiscal year 2019/2020 as compared with outflow of $54.8 million in the preceding fiscal year.

July 18, 2020