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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.

  • K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    KARACHI: K-Electric Limited, the electricity generation and supplier company, has declared huge after tax loss of Rs16.35 billion for the quarter ended September 30, 2022 massive jump of 144 per cent in revenue received through tariff adjustment.

    According to consolidated financial results for the quarter ended September 30, 2022, the company announced after tax loss of Rs16.35 billion as compared with the after tax profit of Rs2.88 billion in the same period of the last year.

    The company announced earnings per share at 59 paisas for the three months period ended September 30, 2022 as compared with EPS of 10 paisas in the same period of the last year.

    Board of directors of KE met on October 28, 2022 to approve the financial results.

    The company declared huge losses despite the massive jump in revenue from tariff adjustment. KE received Rs65.97 billion as tariff adjustment for the quarter ended September 30, 2022 as compared with Rs27.22 billion in the corresponding period of the last year, showing an increase of 144 per cent.

    Total revenue of the company recorded at Rs154.58 billion for the quarter under review as compared with Rs114.17 billion in the same quarter of the last year.

    Cost of sales increased to Rs146.53 billion for three months period ended September 30, 2022 as compared with Rs97.53 billion in the same period of the last year.

    Company official said that the difficult socio-political challenge both locally and at international fronts, have had a consequential impact on the macro-economic factors.

    The economic impact has reverberated through multiple channels, including commodity and financial markets, surging inflation, increasing policy rates and reduction in economic activity. Impacted by these challenges, the Company has observed a reduction in units sent-out by 8.9 per cent and the gross profitability of the Company declined significantly.

    The company operates under regulated tariff and as per current Multi-Year Tariff effective from July 01, 2016, no adjustment is provided to the Company in tariff for changes in sent-out and policy rates. Further, the Company observed increase in exchange loss by PKR 2.6 billion owing to devaluation of Pak Rupee and increase in impairment loss by PKR 4.0 billion against doubtful debts due to high inflation, increase in consumer tariff, high FCA and current economic conditions impacting consumers propensity to pay.

    The aforementioned factors along with increase in finance cost by PKR 3.4 billion mainly on account of increase in effective rate of borrowing and higher levels of borrowing due to non-payment of dues by Government entities, translated into the loss after tax amounting to PKR 16.3 billion.

    The Company is geared up to face the challenges and focusing extensively on further operational improvements as detailed in the relevant business section and also working diligently for renewal of tariff for the next control period starting from July 01, 2023, with an aim to obtain a sustainable cost reflective tariff with robust adjustments mechanism at par with other power sector entities to ensure continuity of reliable and smooth service to consumers at least possible costs.

  • Pakistan reviews petroleum prices for next fortnight amid PTI’s long march

    Pakistan reviews petroleum prices for next fortnight amid PTI’s long march

    ISLAMABAD: Pakistan is set to review petroleum prices on October 31, 2022, as the government is facing challenges including long march initiated by leading opposition party and rising benchmark Brent crude rates in international markets.

    The present coalition government led by PML-N is under immense pressure since coming into power in April 2022. This government is mainly criticized for sky rocket prices of all essential items bringing inflation to record levels. The present government has opportunity to attract masses by allowing sharp cut in petroleum prices for the next fortnight starting from November 01, 2022.

    READ MORE: Pakistan keeps petroleum prices unchanged from October 16, 2022

    On the other hand, Imran Khan, Chairman, Pakistan Tehreek I Insaaf (PTI) launched long march on October 28, 2022 from Lahore demanded the present government to announce general election as the country on the brink of default and masses were witnessing the brunt of high prices.

    The present government has annoyed people through its last decision to keep the prices of petroleum products unchanged. Experts had opinion that the government had room to give benefit by slashing the prices.

    However, the prices were kept unchanged from October 16, 2022 at the level of October 01, 2022. Previously, on September 30, 2022 following changes in petroleum prices were announced:

    The rate of petrol has been reduced by Rs12.63 per liter to Rs224.80 from Rs237.43.

    The price of high speed diesel has been cut by 12.13 per liter to Rs235.30 from Rs247.43.

    The rate of Kerosene oil has been slashed by Rs10.19 to Rs191.83 from Rs202.02.

    The price of light diesel oil has been reduced by Rs10.78 to Rs186.50 from Rs197.28.

    READ MORE: Pakistan sharply reduces petroleum prices from October 01, 2022

    The experts believed that now the government would have fewer options to cut the prices of petroleum products due to rising global oil prices and depreciation in currency value at home.

    Benchmark US Brent soared to $95.77 per barrel as of October 28, 2022. The commodity witnessed an increase of over $5 during the month of October 2022.

    Pakistan is the net importer of petroleum products to meet the domestic demands. Oil import bill of the country went up to $4.86 billion during first quarter (July – September) of the current fiscal year as compared with $4.59 billion in the corresponding quarter of the last year.

    On the other hand the rupee once against started depreciation due to political instability and falling foreign exchange reserves. Although, the SBP recently received $1.17 billion from the International Monetary Fund (IMF) to buffer its foreign exchange reserves and support the local currency. Yet the scheduled repayment gradually dry to foreign exchange reserves position.

    READ MORE: Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Most recently, the SBP again received $1.5 billion from the Asian Development Bank (ADB) to strengthen the foreign exchange reserves position. However, the repayment pressure and rising political noise the rupee unable to show resistance against the dollar.

    The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.

    However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.

    The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

  • OGDCL announces huge oil discovery at Attock

    OGDCL announces huge oil discovery at Attock

    KARACHI: Oil and Gas Development Company Limited (OGDCL) on Thursday announced huge oil discovery at Attock District, Punjab Province, Pakistan.

    The company shared the information of oil discovery with the Pakistan Stock Exchange (PSX) and London Stock Exchange.

    READ MORE: OGDCL discovers gas deposits at Kohat District

    In its communication, the company said that OGDCL being operator of Toot Mining Lease with 100 per cent working interest has made oil discovery from Lockhart Formation at Toot Deep-1 well which is located in Attock District, Punjab province, Pakistan.

    READ MORE: Latest petroleum prices in Pakistan

    Toot Deep # 01 well was spudded-in on December 25, 2022 and successfully drilled down to total depth at 5545 meters in Tobra Formation. Based on interpretation results of open hole logs data, Lockhart Formation has successfully tested oil at the rate of 882 Barrel per day and 0.93 million standard cubic feet per day (MMSCFD) gas at well head flowing pressure (WHFP) of 600 pounds per square inch (psi) at 32/64” choke size.

    READ MORE: Techaccess Pakistan hosts session on in power sector cybersecurity

    “This discovery has further extended the hydrocarbon play area in Pothohar basin, OGDCL being leading exploration and production company in Pakistan has adopted aggressive exploration strategies which has resulted in hydrocarbon discoveries.”

    This discovery will add to the hydrocarbons reserves base of OGDCL and contribute positively towards oil and natural gas production from indigenous resources of Pakistan, the company added.

    READ MORE: Lucky Cement installs 25.3 MW solar energy plant at Karachi

  • Electricity withholding tax not applicable on ATL domestic consumers

    Electricity withholding tax not applicable on ATL domestic consumers

    Domestic consumers of electricity are not subject to withholding income tax if their names are in the Active Taxpayers List (ATL).

    The Federal Board of Revenue (FBR) has issued updated withholding tax card 2022-2023 after incorporating amendments made through Finance Act, 2022 to the Income Tax Ordinance, 2001.

    READ MORE: Tax rates on goods, passenger transport vehicles during 2022-2023

    The FBR collects withholding tax on the electricity consumption under Section 235 of the Income Tax Ordinance, 2001.

    Following are the withholding tax rates and text of the Section 235:

    WITHHOLDING TAX RATES ON ELECTRICITY

    For commercial and industrial consumers:

    1. There will be no tax on gross amount of bill up to Rs500

    2. The rate of withholding tax shall be Rs10 per cent of the amount where gross amount of bill exceeds Rs500 but does not exceed Rs20,000.

    READ MORE: FBR notifies tax rates on brokerage, commission during 2022-2023

    3. The tax shall be Rs1950 plus 12 per cent of the amount exceeding Rs20,000 for commercial consumers. Rs1,950 plus 5 per cent of amount exceeding Rs20,000 for industrial consumers where gross amount of bill exceeds Rs20,000.

    For domestic consumers: (The tax is applicable on person not appearing on ATL)

    The rate of tax to be collected on domestic electricity consumption shall be: (i) zero percent the amount of monthly bill is less than Rs. 25,000; and (ii) 7.5 per cent if the amount of monthly bill is Rs. 25,000 or more.

    READ MORE: Non-ATL to pay 200% more tax on motor vehicle purchase during 2022-2023

    Section 235. Electricity consumption

    (1) There shall be collected advance tax at the rates specified in Division IV of Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial or domestic consumer:

    Provided that the provisions of sub-section (1) shall not apply to a domestic consumer of electricity if his name appears on the Active Taxpayers’ List.

    (1A) In addition to tax collectible under sub-section (1), there shall be collected tax at the rates given in the Division IV of Part IV of First Schedule from retailers and service providers as provided under section 99A of the Ordinance:

    Provided that the tax shall not be collectible under this sub-section if the tax has been collected from the person under sub-section (9) of section 3 of the Sales Tax Act, 1990 as provided in the general order issued under section 99A of the Ordinance.

    READ MORE: FBR notifies tax rates on prize bond, lottery winning during 2022-2023

    (2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    (3) Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax or that he has discharged advance tax liability under section 147 or whose entire income is subject to final tax regime or minimum tax regime under any provisions of this Ordinance other than this section.

    READ MORE: Tax rates for rental income from immovable property during 2022-2023

    (4) Under this section, —

    (a) in the case of a taxpayer other than a company, tax collected upto bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;

    (b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and

    (c) in the case of a company, tax collected shall be adjustable against tax liability.

  • Today’s petroleum prices in Pakistan on Oct 21, 2022

    Today’s petroleum prices in Pakistan on Oct 21, 2022

    ISLAMABAD: The prices of petroleum prices in Pakistan as of October 21, 2022 is as follow:

    The rate of petrol is Rs224.80 per liter.

    The price of high speed diesel is Rs235.30 per liter.

    The rate of Kerosene oil is Rs191.83 per liter.

    The price of light diesel oil is Rs186.50 per liter.

    READ MORE: Pakistan keeps petroleum prices unchanged from October 16, 2022

    The federal government on Thursday October 20, 2022 hinted at downward revision of petroleum prices. However, the changes would be announced on October 31, 2022 for next fortnight.

    Previously, on October 15, 2022 the government decided to keep the prices of petroleum products unchanged for the fortnight starting from October 16, 2022.

    Finance Minister Muhammad Ishaq Dar in a statement said that Oil and Gas Regulatory Authority (OGRA) had sent summary for increase in prices of petroleum products but the government had decided to maintain the prices at the level of October 01, 2022 and will be applicable till October 31, 2022.

    READ MORE: Pakistan sharply reduces petroleum prices from October 01, 2022

    Energy experts were believing that the government would announce a sharp reduction in petroleum prices for next fortnight starting from October 16, 2022 owing to massive gain in value of local currency and lower prices of oil in international markets.

    Finance Minister Ishaq Dar had also hinted to reduce the oil prices significantly in order to stabilize the economy and ease the burden of high prices.

    READ MORE: Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.

    However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.

    The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

  • Cabinet approves expansion of advance meters installation

    Cabinet approves expansion of advance meters installation

    ISLAMABAD: The federal cabinet, chaired by Prime Minister Muhammad Shehbaz Sharif, approved the expansion of the advanced meters project beyond Islamabad to address line losses in the power sector.

    (more…)
  • Pakistan keeps petroleum prices unchanged from October 16, 2022

    Pakistan keeps petroleum prices unchanged from October 16, 2022

    The government of Pakistan has decided to keep the prices of petroleum products unchanged for the fortnight starting from October 16, 2022.

    Finance Minister Muhammad Ishaq Dar in a statement said that Oil and Gas Regulatory Authority (OGRA) had sent summary for increase in prices of petroleum products but the government had decided to maintain the prices at the level of October 01, 2022 and will be applicable till October 31, 2022.

    READ MORE: Pakistan sharply reduces petroleum prices from October 01, 2022

    Therefore the prices from October 16, 2022 shall be remained at the level of October 01, 2022. Previously, on September 30, 2022 following changes in petroleum prices were announced:

    The rate of petrol has been reduced by Rs12.63 per liter to Rs224.80 from Rs237.43.

    The price of high speed diesel has been cut by 12.13 per liter to Rs235.30 from Rs247.43.

    The rate of Kerosene oil has been slashed by Rs10.19 to Rs191.83 from Rs202.02.

    The price of light diesel oil has been reduced by Rs10.78 to Rs186.50 from Rs197.28.

    READ MORE: Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Energy experts were believing that the government would announce a sharp reduction in petroleum prices for next fortnight starting from October 16, 2022 owing to massive gain in value of local currency and lower prices of oil in international markets.

    Finance Minister Ishaq Dar had also hinted to reduce the oil prices significantly in order to stabilize the economy and ease the burden of high prices.

    The Pakistani Rupee (PKR) has recorded massive gain 13 sessions against the dollar.

    Furthermore, the benchmark US Brent oil also fell owing to fears of lower demand globally.

    The government has reduced the petroleum prices in the wake of massive decline in international oil prices.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

    The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.

    However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.

    READ MORE: New petroleum prices in Pakistan from September 01, 2022

    The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

  • FBR collects Rs459 billion as sales tax on POL products in TY 2022

    FBR collects Rs459 billion as sales tax on POL products in TY 2022

    The Federal Board of Revenue (FBR) has reported a substantial growth in sales tax collection on the import of Petroleum, Oil, and Lubricants (POL) products during the tax year 2022, reaching an impressive Rs459 billion.

    (more…)
  • Mari Petroleum plans first offshore drilling by 4QFY23

    Mari Petroleum plans first offshore drilling by 4QFY23

    KARACHI: Mari Petroleum Company has planned to drill first well at offshore block in fourth quarter of the current fiscal year.

    The management of the company on Friday while commenting on the Abu Dhabi offshore block, disclosed that the company planned to drill first well in 4QFY23 with the consortium. “For this, company has invested $10 million which will bear drilling expenditures,” according to Insight Research.

    READ MORE: Mari Petroleum stops production from Zarghun, Bolan fields

    Mari Petroleum conducted corporate briefing to discuss financial results and future outlook of the company.

    The Insight Research highlighted key takeaways from the briefing.

    During fiscal year 2021/2022, MARI posted highest net sales and profit after tax of PKR 95 billion and PKR 33 billion with PKR 247.80 Earning Per Share (EPS), up by 30 per cent and 5 per cent Year on Year (YoY), respectively.

    The increase in earnings is attributable to higher realized gas prices led by elevated oil prices and PKR devaluation coupled with higher gas production.

    Company’s production has crossed the mark of 100K BOEPD first time in history due to export of undrawn volumes towards SNGPL network and addition of new wells.

    To highlight, company has exported 45bcf gas towards SNGPL network under 3rd party pipeline access to sell gas.

    The company has planned a CAPEX of $200 million for a period of FY23-FY24, however, materialization of this development hinges on various factors, including security conditions, operational disruptions etc.

    As part of company’s aggressive strategy to acquire new exploration sites, company has won 11 blocks in 2 years (FY21 and FY22), taking cumulative blocks to 29.

    According to management, gas reserves estimate for Bannu west-1 is 55 mmcfd, whereas it will take 7-8 months to come online depending upon on the security situation.

    As per company, average production of Habib Rahi Limestone (HRL) is 630 mmcfd in which company is entitled to receive incremental pricing based on PP-12 on production above 525 mmcfd.

    In recent development, company has successfully completed and tested its first ever horizontal development well in HRL reservoir at a gas rate of around 21mmcfd with a well head pressure of 426 Psi.

  • Pakistan Petroleum discovers gas in Sindh

    Pakistan Petroleum discovers gas in Sindh

    KARACHI: Pakistan Petroleum Limited (PPL) on Wednesday announced discovery of gas from its well located in District Sanghar, Sindh province.

    The company in a communication sent to Pakistan Stock Exchange (PSX), announced a gas and condensate discovery from exploration well Shahpur Chakar North X-1, in Block 2568-18 (Gambat South), located in District Sanghar, Sindh Province.

    READ MORE: Pakistan may sharply cut petroleum prices from Oct 16, 2022

    Block 2568-18 (Gambat South) EL is operated by Pakistan Petroleum Limited (PPL) with 65 per cent working interest (WI) along with its Joint Venture Partners Government Holdings Private Limited (GHPL) and Asia Resources Oil Limited (AROL) with 25 per cent and 10 per cent WI, respectively.

    READ MORE: OGDCL announces gas discovery in KPK

    The exploration well Shahpur Chakar North X-1 was drilled to a depth of 3,560 m to test the hydrocarbon potential of Massive Sand of Lower Goru Formation. Based on the wire line logs, potential hydrocarbon bearing zones were identified inside the target reservoirs. Initial testing in the Massive Sand (Deep) interval of Lower Goru Formation flowed 15.2 Million Cubic Feet per Day (MMSCFD) of gas along with condensate of 321 Barrels per Day (BPD) at a Flowing Wellhead Pressure (FWHP) of 3,061 psig on a 32/64″ choke.

    READ MORE: OGDCL announces gas discovery at Sial-1 Well in Sindh

    This discovery will add hydrocarbon reserves of PPL and joint venture partners, contribute in reducing the energy demand and supply gap in the country, and will save significant foreign exchange for the country through indigenous hydrocarbon production