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Category: Energy

You can go through stories related to energy. The stories are about changes in petroleum prices and updates on energy sector of Pakistan and world.

  • Domestic oil sales plunge by 35 percent in April

    Domestic oil sales plunge by 35 percent in April

    KARACHI: The domestic sales of petroleum products have plunged by 35 percent to 1.07 million tons in April 2020 as compared with 1.65 million tons in the same month of the last year.

    However, the sales in April 2020 increased by three percent when compared with 1.03 million tons in March 2020.

    Analysts at Arif Habib Limited attributed the increase in sales of petroleum products to: 1) Surge in sales of HSD on account of higher demand from agriculture sector given beginning of wheat harvesting season, and 2) Closure of Iran border resulting in lower availability of illegally dumped fuel.

    Pertinently, sales of FO, MS and HSD witnessed a steep decline of 75 percent, 36 percent and 16 percent YoY to 0.07 million tons, 0.44 million tons and 0.55 million tons, respectively.

    As per market sources, oil consumption witnessed a rising trend since the government opted for a ‘smart lockdown’ and issued Standard Operating Procedures (SOP) for construction and export oriented industries.

    However, if lockdown is extended (deadline is May 09, 2020) then this will be negative for May 2020 sales.

    On a monthly basis, MS sales dropped by 21 percent MoM while HSD and FO volumes grew by 41 percent and 2 percent MoM respectively.

    The analysts expect demand for furnace oil to increase in upcoming months due to higher demand of power in summer season coupled with historic low prices (FO touched USD 77/M.T on 22nd April’20) which may improve merit order of furnace oil based power plants.

    During first ten months of current fiscal year, total White and Black Oil sales clocked-in at 13.35 million tons, depicting a decline of 13 percent YoY due to dip in sales volumes of MS, HSD and FO by 3 percent, 15 percent and 31 percent YoY, respectively.

    Motor Gasoline sales witnessed a meager decline of 3 percent YoY to 5.99 million tons due to the Coronavirus. However, massive reduction in price will increase demand as customers will prefer petrol over Compressed Natural Gas (CNG). High Speed Diesel (HSD) sales shrunk by 15 percent YoY to 5.15 million tons led by i) Sharp slowdown in Agriculture sector, ii) Negative growth of 3.03 percent YoY in the manufacturing sector of LSM, and iii) Availability of smuggled HSD from Iran, which is cheaper in contrast to official imported product.

    Meanwhile, FO is being replaced by other sources namely Coal, Hydel and RLNG, resulting in a decline of 31 percent YoY to 1.68 million tons compared to 2.44 million tons in SPLY.

  • Prices of petroleum products slashed up to 39 percent

    Prices of petroleum products slashed up to 39 percent

    ISLAMABAD: The government on Thursday announced a significant reduction in the prices of petroleum products, with cuts reaching up to 39 percent. This move aims to pass on the benefits of the massive decline in international oil prices to the public.

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  • NEPRA examines power audit report to secure consumers interest

    NEPRA examines power audit report to secure consumers interest

    ISLAMABAD:  National Electric Power Regulatory Authority (NEPRA) has decided to examine the power sector audit report and said that it will take every step to secure consumers’ interest.

    In a statement issued on Saturday the regulator said that it is examining the recently released final Report by the Committee for power sector audit, circular debt resolution and future roadmap.

    “The report has never been shared with the NEPRA Authority before despite a clear agreement on the onset with the Convener of the Committee,” it said.

    NEPRA has constituted a team of experts to examine the report so as to prepare NEPRA’s detailed response and suggest suitable actions thereof. “NEPRA will take every action within its powers to ensure that consumer interest has not been compromised by carefully looking into any misrepresentation of facts and figures by any IPP as suggested in the report.”

    NEPRA determines tariff as per the Council of Common Interest (CCI) approved Government policy and after carrying out quasi-judicial proceedings in an open and transparent manner.

    Public hearings are held and participated by all the stakeholders including Government/ power sector representatives, industry experts, members of the civil society, media and legal experts.

    Every single word during public hearing is recorded and verbatim transcript is maintained for any future reference.

    NEPRA functions in the most professional manner, maintains the highest level of integrity and professional competence, duly acknowledged by local and international agencies.

    “Earlier in Feb 2019, on reports of earning excessive profit by certain RFO based plants, NEPRA proceeded with the Suo Moto and issued notices against five RFO based plants namely (Nishat Power Limited, Nishat Chunian Power Limited, Atlas Power Limited, Attock Gen Limited, Liberty Power Tech Limited), according to the statement.

    However, further proceedings were held up due to a restraining order issued by Honorable Islamabad High Court (IHC). Meanwhile, NEPRA is pursuing the case vigorously and it is likely to be decided shortly.

    It is further emphasized that consumers’ interest is prime for NEPRA and we assure to do everything within our powers to safeguard it.

  • IPPAC rejects allegations of power sector losses

    IPPAC rejects allegations of power sector losses

    KARACHI: Independent Power Producers Advisory Council (IPPAC) has rejected the allegations of power sector losses made through the inquire committee’s report submitted to the prime minister.

    In response to the recent reports appearing in media on the Inquiry Committee’s Report (Report) over alleged losses in the Power Sector, the IPPAC categorically rejected the allegations being attributed to such report.

    The reports appearing in the media makes unsubstantiated allegations against the Independent Power Producers (IPPs), accusing them of having unfair agreements, and misappropriation in tariff and fuel consumption rates.

    “Neither the IPPAC nor any IPP was consulted or approached in preparing of the Report or its contents. The allegations being levelled on the IPPs are ill-conceived, unfounded, baseless and disappointing, which is causing serious damage to our reputation.”

    The IPPs have given their sweat and blood for the development of Pakistan at a time when no one was willing to invest in the country. The IPPs have empowered an uncertain economy, which had not witnessed such a sizeable quantum of Foreign Direct Investment ever in the past, it said.

    It is important to highlight that while the Government has not paid the IPPs for years, and IPPs are at the brink of default being owed an amount of approximately Rs. 600 billion, they still continue to remain available to provide uninterrupted supply of electricity for the country, always keeping the greater national interest at the forefront.

    Previously, nine IPPs had already given a lot of relaxations to the Government in the form of a Settlement Agreement, keeping in mind the national interest. Yet it was the Government that has been unable to obtain formal approval(s) to implement the same; hence that opportunity has been lost.

    The settlement agreement was consented to by such IPPs that had won the Arbitral Award by the London Court of International Arbitration (LCIA) in 2017 for the recovery of unpaid capacity payments, which had been deducted in contravention of legally valid and binding Power Purchase Agreements.

    It is important to remember that similar witch-hunting exercises in the past have caused immense damage to the investment climate and economic prospects of the country, and if we do not learn from the past mistakes, it will again lead to the same negative results.

    The IPPs have always remained available to engage in a meaningful dialogue with the Government to discuss and find an amicable solution to the most pressing needs of the country.

    In the prevalent conditions, given the COVID-19 Pandemic, the IPPAC and IPPs stand ready to do their part to help the Pakistan economy and nation during this time of need, in addition to providing uninterrupted power supply.

  • Oil consumption falls by 40pc during coronavirus lockdown

    Oil consumption falls by 40pc during coronavirus lockdown

    KARACHI: The oil consumption during last 15 days of the current month has declined by an average 40 percent due to lockdown to control outbreak of coronavirus.

    Analysts at Topline Securities said that the oil consumption has declined to 26,000 tons/day compared to average consumption of 46,000 tons/day, which is due to the lockdowns announced by the provinces to control the outbreak of Covid-19.

    Due to Covid-19 outbreak, Oil sales for March-2020 are expected to decline by 33 percent YoY (and 5 percent MoM) largely driven by declines in High Speed Diesel (HSD) and Furnace Oil (FO) volumes of 31 percent YoY and 62 percent YoY, respectively.

    Ex-FO performance did not fare well either as 29 percent YoY decline is likely. The slight uptick in FO volumes witnessed in Jan-2020 has quickly disappeared with declines of 33 percent MoM and 51 percent MoM in Feb-2020 and Mar-2020, respectively.

    During 9MFY20, overall volumes went down by 13 percent YoY (ex FO 8 percent) due to overall economic slowdown and impact of Covid-19.

    PSO sales are likely to decline the most by 46 percent YoY. FO volumes are expected to decline by 88 percent YoY, HSD volumes by 34 percent YoY and MS volumes by 18 percent YoY.

    HASCOL volumes are likely to decline by 35 percent YoY, but are expected to improve by 11 percent MoM.

    APL and SHEL volumes are expected to decline by 30 percent YoY and 28 percent YoY, respectively during the month.

  • Attock Refinery warns complete shut down on lower uplifting

    Attock Refinery warns complete shut down on lower uplifting

    KARACHI: Attock Refinery Limited has issued a grave warning regarding the continuation of its operations, stating that a complete shutdown is imminent within a week if the current situation regarding product uplifting does not improve significantly.

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  • Shanghai Electric allows to make offer for K-Electric till June 26

    Shanghai Electric allows to make offer for K-Electric till June 26

    KARACHI: Securities and Exchange Commission of Pakistan (SECP) has granted extension of 90 days to make public announcement of offer by Shanghai Electric Power Company Limited to acquire shares of K-Electric.

    In an announcement on Monday, K-Electric with reference to the public announcement to acquire 66.4 percent shares of K-Electric Limited made by the acquirer on September 30, 2019, Arif Habib Limited is acting in the capacity of Manager to the Offer for the acquisition.

    As part of the acquisition process, the acquirer had requested an extension of 90 days in making public announcement of offer which was to be made by March 28, 2020 as per the law.

    In this regard SECP granted extension of 90 days up to June 26, 2020.

  • OCAC suggests fortnightly POL prices revision

    OCAC suggests fortnightly POL prices revision

    KARACHI: The Oil Companies Advisory Committee (OCAC) has advised the government to review petroleum prices on fortnightly basis instead monthly basis.

    In a letter to Secretary Petroleum, the OCAC said that due to the declining petroleum products prices experienced in February and March 2020, the whole downstream oil industry was facing uncertainty and financial exposure.

    “As a consequence, upliftment from refineries and Oil Market Companies (OMCs) depots is depressed when there is also a huge trading exposure in imports,” it said, adding that needless to mention, the losses incurred and being incurred by oil industry due to fluctuation of Pak Rupee/ US Dollar parity is also over and above the pricing exposure.

    “In light of above to mitigate the situation in weeks and months ahead so as to avoid any undesirable situation in terms of imports shyness and availability of petroleum products, we proposes to switch the frequency of petroleum products pricing from monthly to fortnightly basis and if further needed to weekly basis.”

    It is pertinent to mention that fortnightly prices have also been successfully implemented in the past, the OCAC said.

    Recently, analysts at Topline Securities revised down earning forecast for Oil and Gas exploration companies over FY20E-22F by 18-33 percent due to: downward revision in international oil price assumption; incorporation of lower-than-expected 1HFY20 results; and likely delays in production from few fields mainly for MARI.

    The Energy Information Administration (EIA) has downward revised their oil price forecast by 33 percent and 13 percent to US$43 and US$55/bbl for 2020E and 2021F, respectively in the aftermath of deadlock over production cuts between OPEC and allied countries (mainly Russia). Saudi Arabia announced price discounts and production increase to 12.3mn bopd (current 9.8mn bopd) from Apr 2020 onwards.

    To note, crude oil prices (Arab Light) are down 46 percent to US$37/bbl since Dec 31, 2019.

    Concerns over epidemic Corona Virus Disease (COVID) is also weighing down on the global growth outlook and subsequently on oil demand. OPEC in its recent Mar 2020 report (released on Mar 11) has revised down World GDP growth target to 2.4 percent vs. earlier 3.0 percent for 2020.

  • Byco Petroleum announces setting up diesel hydro de-sulphurising unit

    Byco Petroleum announces setting up diesel hydro de-sulphurising unit

    KARACHI: Byco Petroleum Pakistan Limited has announced to set up a diesel hydro de-sulphurising unit and a fluid catalytic cracking unit with the facilitation from Byco Industries Incorporated.

    In an information shared with Pakistan Stock Exchange (PSX) on Monday, the company said that a meeting of the Board of Directors of Byco Petroleum Pakistan Limited was held on Monday, March 09, 2020 and decided in-principal to set up: a diesel hydro de-sulphurising unit; and a fluid catalytic cracking unit.

    These facilities will be set up with the facilitation from Byco Industries Incorporated, being the majority stakeholders of the company.

    Consequently, for such purpose, the board resolved to call an extraordinary general meeting of the shareholders for seeking approval/authorization to enter into transactions/arrangements with the company’s related party, Cnergyico PK Limited (CPL) for: leasing of necessary assets/components by the company from CPL, which will be assembled into refinery units, including (a) a diesel hydro de-sulphurising unit and (b) a fluit catalytic cracking unit; and availing a subordinated loan from CPL, for the purpose of installing, commissioning and making operational the processing units, which shall enable the company to reduce sulphur content in diesel and convert furnace oil into gasoline and diesel for use in its business and ancillary arrangements.

  • Domestic oil sales fall by 14% on economic slowdown

    Domestic oil sales fall by 14% on economic slowdown

    KARACHI: The domestic oil sales have declined by 14 percent during July – February 2019/2020 due to economic slowdown.

    According to statistics by Oil Companies Advisory Committee (OCAC), the domestic oil sales fell to 11.24 million tons during first eight months of current fiscal year as compared with 13.1 million tons in the corresponding period of the last fiscal year.

    Analysts at Topline Securities said that the lower consumption was largely attributed to economic slowdown.

    The sales of motor spirit (petrol) were flat at 5 million tons during the period under review. However, sales of furnace oil and high speed diesel fell by 33 percent and 14 percent respectively.

    The analysts said that oil sale for Feb 2020 was decline by 26 percent YoY largely driven by a decline in HSD and FO volumes.

    In absolute terms the decline was of 221,000 tons in HSD (-37 percent YoY). The lower consumption is largely attributed to the economic slowdown.

    Ex-FO performance did not fare well as 26 percent YoY and 15 percent MoM decline is expected.

    The slight uptick in FO volumes was witnessed in last month (Jan 2020) at the behest of a significant price decline. Since then FO prices have witnessed a gradual recovery.

    HASCOL remained the top laggard with decline in volumes by 61 percent and 33 percent YoY and MoM, respectively.

    Market share of the company in MS/HSD has declined by 430bps/810bps YoY. Similarly on MoM basis, market share is down by 160bps/250bps.

    APL has gained market share in HSD and MS both by 390bps and 120bps MoM to 13.2 percent and 10.1 percent respectively.

    PSO’s share in MS declined by 2.4 percent to settle at 35.4 percent. SHEL managed to maintain its market share at 11.7 percent mark in MS their main segment.