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.

New petroleum prices in Pakistan from August 1, 2022

KARACHI: Pakistan on Sunday revised the prices of petroleum products effective from August 01, 2022.

Ministry of Finance announced the following rates effective from August 01, 2022:

The new prices of petrol have been decreased by Rs3.05 per liter to Rs227.19 from Rs230.24.

The rate of high speed diesel has been increased by Rs8.95 per liter to Rs244.95 from Rs236.

The rate of kerosene oil has been increased by Rs4.62 per liter to Rs201.07 from Rs196.45.

Similarly, the rate of light speed diesel has been decreased by 12 paisas per liter to Rs191.32 from Rs191.44.

READ MORE: New petroleum prices in Pakistan from July 15, 2022

Previously the present government had started increasing the petroleum prices on May 26, 2022 when the benchmark Brent Oil was at $112 per barrel and now as of July 29, 2022, the international prices of Brent Oil have fallen to $110 per barrel.

Considering the price slump of international oil, the government had reduced the prices of petroleum products from July 15, 2022. However experts believed it was political decision as the government had to increase petroleum levy and apply sales tax.

Furthermore the Pakistani Rupee (PKR) has sharply fell against the dollar leaving no room for the government but to increase the prices of petroleum products.

READ MORE: New prices of petroleum products in Pakistan from July 01, 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 June 16, 2022

The new government of Prime Minister Shehbaz Sharif increased the prices of petroleum products on May 26, 2022, June 02, 2022 and June 15, 2022. Cumulatively, the government increased the price of petrol by 84 per liter in these price hikes.

The present government in the budget estimated to collect Rs750 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 from June 03, 2022

July 31, 2022
ECC approves petroleum dealer margin at Rs7/liter

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet has approved to fix petroleum dealers margin at Rs7 per liter for petrol and high speed diesel.

The decision has been taken at a meeting of the ECC presided over by Finance Minister Miftah Ismail on Thursday.

The Petroleum Division submitted a summary on revision of Oil Marketing Companies (OMCs) and dealers margins on petroleum products.

READ MORE: Pakistan allows release of banned items stuck up at ports

It was informed that the existing margins were fixed in December, 2021 and Pakistan Petroleum Dealers Association has approached the government for immediate revision of their margins due to inflation, increase in tariff salaries and utility bills, etc.

Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Planning, Development and Special Initiatives Prof. Ahsan Iqbal, Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Federal Minister for Power , Khurram Dastgir Khan, Federal Minister for National Food Security and Research Chaudhary Tariq Bashir Cheema, Shahid Khaqan Abbasi – MNA/ex-PM, Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, Minister of State for Petroleum Musadik Masood Malik, Rana Ihsan Afzal, Coordinator to the PM on Commerce and Industry, Coordinator to the PM on Economy, Bial Azhar Kayani, Federal Secretaries and senior officers attended the meeting.

READ MORE: SBP makes permission mandatory for motor car import

Ministry of National Food Security and Research submitted a summary on urgent advice relating to award of 4th International Wheat Tender 2022 opened on 25th July, 2022.

It was informed that Trading Corporation of Pakistan (TCP) issued 4th tender on 19-05-2022 for securing quantity of 200,000 MT of imported wheat on CFR basis.

The tender was opened on 25-07-2022 wherein six (06) international suppliers participated, out of which 05 offered rates. The ECC after detailed discussion approved the lowest bid offered by M/s Falconbridge FZLLC@ US$ 407.49/MT CFR bulk on sight LC basis with direction to TCP to negotiate with the Russian authorities to procure wheat on lower rate subject to confirmation of the ECC.

Ministry of Water Resources submitted a summary on compensation package for the Chinese causalities at Dasu Hydro Power project.

READ MORE: Pakistan’s import bill records over $80 bn in 2021/2022

The ECC decided that the amount of compensation/ good will package will remain the same as per ECC’s earlier decision dated January 21,2022 ( i.e US$ 11.6 million) and approved disbursement of the compensation/goodwill amount directly to the company M/s China Gezhouba Group International Engineering Co. Ltd (CGGC) through Ministry of Foreign Affairs.

The Ministry of Industries and Production submitted a summary on issues faced by Fatima Fertilizer (Sheikhupura Plant) and Agritech.

Both the SNGPL based plants are operated by provisioning of RLNG on cost sharing basis. Gas rate for operation of these plants is worked out on the basis of Variable Contribution Margin (VCM).

Due to price increase in fuel prices and other factors, both plants have approached M/o I&P for revision of VCM and capping of GST at the price paid by the plants.

READ MORE: CMOs worry over power outages, 100% cash margin on imports

The ECC after discussion approved the proposal to ensure compliance with the earlier decision of the ECC and the Federal Cabinet of shifting both the plants to indigenous gas.

The committee further directed Ministries of Petroleum, Finance, National Food Security and Industries & production to work out the gas price/VCM for the Fertilizers. The ECC also decided that Sales tax may be charged on the actual price of the gas being paid by the company.

July 29, 2022
KAPCO to contest NEPRA’s show cause notice

KARACHI: Kot Addu Power Company (KAPCO) on Tuesday announced to contest a show cause notice issued by a regulatory authority.

In a communication sent to Pakistan Stock Exchange (PSX), the company said it will contest the show cause notice as per law by, inter alia, submitting a detailed reply within the stipulated period and will vehemently present its case before NEPRA and all relevant forums that there is no breach by the Company of any rules and regulations under the NEPRA Act.

READ MORE: Pakistan approves LNG at $9 per MMBTU for export sector

The National Electric Power Regulatory Authority (NEPRA) has issued a show cause notice (received on July 25, 2022) to the Company under section 27B of Regulatory of Generation, Transmission and Distribution of Electric Power Act, 1997 (NEPRA Act) read with relevant rules and regulations alleging prima facie violation of Regulation 6 (2) of NEPRA Interim Power Procurement (Procedures and Standards) Regulations, 2005 in respect of the extension of the Company’s Power Purchase Agreement (PPA) for a period of 485 days pursuant to the terms agreed between the Company and the Power Purchaser for settlement of the liquidated damages dispute between the Company and the Power Purchaser by invoking the terms of the PPA under Other Force Majeure Events (OFME).

READ MORE: NEPRA to conduct public hearing on KE’s petition on July 28

Through the show cause notice, NEPRA has sought reply of the Company, to be submitted not later than fifteen days of receipt of the show cause notice, as to why appropriate legal action may not be taken against the Company under relevant rules and regulations of the NEPRA Act, inter alia, including imposition of fine as prescribed.

It is Company’s position that the extension of the PPA for 485 days is within the terms of the PPA and Company’s application for extension of generation license was filed with NEPRA within the period stipulated in the applicable regulations. Hence, there is no breach by the Company of any applicable regulations.

July 26, 2022
Pakistan approves LNG at $9 per MMBTU for export sector

ISLAMABAD: Pakistan on Monday approved a rate of $9 per MMBTU for supply of LNG to export sector across the country.

The country’s apex economic coordination body approved the rates to provide competitive environment to the export sector at par with regional economies.

READ MORE: NEPRA to conduct public hearing on KE’s petition on July 28

Federal Minister for Finance and Revenue Miftah Ismail presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet at Finance Division, on Monday.

Federal Minister for Defence Khawaja Muhammad Asif, Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Federal Minister for Power Khurram Dastgir Khan, Shahid Khaqan Abbasi – MNA, Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, Minister of State for Petroleum Mr. Musadik Masood Malik, Rana Ihsan Afzal, Coordinator to PM on Commerce & Industry, Federal Secretaries and senior officers attended the meeting.

READ MORE: Revised power tariff, taxes on electricity bills in Pakistan

Ministry of Commerce presented a summary on regional competitive energy rates for export oriented sectors during financial year 2022-23.

It was submitted that in pursuance of the decisions of ECC dated August 16, 2021 and the Federal Cabinet dated August 24, 2021, the government provided energy to the export oriented sectors namely Textile including Jute, Leather, Carpet, Surgical and Sports goods at regional competitive rates to reduce cost of manufacturing and enhance exports.

The ECC after detailed discussion approved RLNG rate at US $9 per MMBTU, all inclusive to five export oriented sectors across Pakistan for existing gas connections.

READ MORE: K-Electric, Siemens sign deal for KKI Grid construction

A subsidy cover of Rs. 40 billion for RLNG has been allocated under Federal budget 2022-23 which will be reviewed on quarterly basis.

Further, ECC recommended to the Federal Cabinet to raise the tariff of indigenous gas for export oriented sectors at Rs. 1350 per MMBTU and for general industry at Rs. 1550 per MMBTU.

The ECC also approved the electricity rate at US cents 9 per kWh to five export oriented sectors from 1st August 2022 subject to (i) subsidy of Rs. 20 billion provided by Finance Division (ii) quarterly review of the subsidy (iii) Petroleum Division will provide a list of industrial units getting subsidized gas and electricity, within one month to the ECC for review.

READ MORE: Rupee devaluation severely affects KE’s profitability

The committee approved supplementary grant of Rs750 million for Ministry of Information and Broadcasting for 75 years’ Independence Day celebrations.

The ECC also approved proposal of Ministry of Interior for payment of compensation/goodwill package from its own budget.

July 26, 2022
NEPRA to conduct public hearing on KE’s petition on July 28

KARACHI: National Electric Power Regulatory Authority (NEPRA) has announced to conduct a public hearing on July 28 over the petition submitted by K-Electric on Fuel Charges Adjustments (FCA) for June 2022.

The utility has sought an increase of Rs11.38/KWh in its FCA petition for June 2022. As per applicable tariff across the country, fuel adjustment is reviewed every month and is applicable on consumer bills for only one particular month.

READ MORE: Revised power tariff, taxes on electricity bills in Pakistan

The major impact on the monthly Fuel cost adjustment of June 2022 is due to an increase in the fuel price increase of Furnace Oil and power purchased from CPPA-G.

The price of RLNG in June 2022 has increased by 50 per cent from March 2022. The price of RLNG as at June 2022 is Rs4,627 / MMBTU as compared to the price of Rs3,083 / MMBTU in March 2022.

The price of electricity from CPPA-G in June 2022 has increased by 74 per cent from March 2022. The price of power purchased from CPPA-G as at June 2022 is Rs15.844/KWh as compared to the price of Rs9.098/ KWh in March 2022.

READ MORE: K-Electric, Siemens sign deal for KKI Grid construction

Fuel Charge Adjustment (FCA) is incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. These costs are passed through to the consumers following NEPRA’s scrutiny and approval and are one-time charges. Consumers also receive a benefit when the cost of fuel decreases.

After the public hearing and scrutiny, the regulator will make a decision on the request and issue instructions on the period during which these costs can be applied to consumer bills.

READ MORE: Rupee devaluation severely affects KE’s profitability

K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005 KE is the only vertically integrated utility in Pakistan supplying electricity within a 6500 square Kilometre territory including Karachi and its adjoining areas.

The majority shares (66.4 per cent) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan is also a minority shareholder (24.36 per cent) in the company.

READ MORE: KE’s profit up by 161% on high tariff adjustment

July 21, 2022
Pakistan may increase petrol prices from August 1, 2022

KARACHI: Pakistan may review prices of petroleum products for the next fortnight on July 31, 2022, which also consider the massive depreciation of rupee value.

Previously the present government had started increasing the petroleum prices on May 26, 2022 when the benchmark Brent Oil was at $112 per barrel and now as of today July 21, 2022, the international prices of Brent Oil have fallen to $103 per barrel.

Considering the latest price slump of international oil, the government had reduced the prices of petroleum products from July 15, 2022. However experts believed it was political decision as the government had to increase petroleum levy and apply sales tax.

Furthermore the Pakistani Rupee (PKR) has sharply fell against the dollar leaving no room for the government but to increase the prices of petroleum products.

READ MORE: New petroleum prices in Pakistan from July 15, 2022

The local currency depreciated by around 11 per cent during the month of July to close at 226.81 to the US Dollar on July 21, 2022.

Pakistan is net importer of petroleum products and spends huge foreign exchange for the purchase.

The country imported petroleum products worth $23.32 billion during fiscal year 2021-2022 as compared with $11.35 billion in the preceding year, showing a growth 105 per cent.

In the previous announcement on July 14, 2022, the government announced the following prices of petroleum products.

The new prices of petrol have been decreased by Rs18.50 per liter to Rs230.24 from Rs248.74.

The rate of high speed diesel has been decreased by Rs40.54 per liter to Rs235.95 from Rs276.54.

The rate of kerosene oil has been decreased by Rs33.81 per liter to Rs196.45 from Rs230.26.

Similarly, the rate of light speed diesel has been decreased by Rs34.71 per liter to Rs191.44 from Rs226.15.

READ MORE: New prices of petroleum products in Pakistan from July 01, 2022

The Prime Minister on July 12, 2022 directed the authorities to pass on the full benefit of falling oil prices in the international markets to the masses.

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 June 16, 2022

The new government of Prime Minister Shehbaz Sharif increased the prices of petroleum products on May 26, 2022, June 02, 2022 and June 15, 2022. Cumulatively, the government increased the price of petrol by 84 per liter in these price hikes.

The present government in the budget estimated to collect Rs750 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.

July 21, 2022
Imran Khan demands substantial reduction in petroleum prices

ISLAMABAD: The chairman of Pakistan Tehreek-e-Insaf (PTI), Imran Khan on Monday demanded the present coalition government to reduce the petroleum prices drastically.

In a public address on Monday, after securing landslide victory in by-election, Imran Khan demanded the government to cut off petrol prices because the oil prices in the international market has been reduced sharply.

Imran Khan, the former prime minister who was removed from the executive post on April 10, 2022 through a motion of no confidence.

READ MORE: New petroleum prices in Pakistan from July 15, 2022

Earlier, in February 2022, Imran Khan as the prime minister announced massive relief to the masses through grant of huge subsidy on petroleum prices and electricity tariff.

The PTI had also kept the petroleum levy and sales tax at zero to avoid passing on the high prices of crude oil in international market.

Imran Khan said that during his government the prices of petroleum products were kept at subsidized rates when oil prices in the international market were $106 per barrel. But now oil prices have been drastically reduced to $96 per barrel, so the government should reduce the price of petrol products according to the ratio of oil prices in the international market.

The government on July 14, 2022 announced reduction in prices of petroleum products effective from July 15, 2022 after a massive decline observed in the prices of oil in international markets.

READ MORE: Slashing petroleum prices summary to be sent: Miftah

Following are the recent prices of petroleum products:

The prices of petrol have been decreased by Rs18.50 per liter to Rs230.24 from Rs248.74.

The rate of high speed diesel has been decreased by Rs40.54 per liter to Rs235.95 from Rs276.54.

The rate of kerosene oil has been decreased by Rs33.81 per liter to Rs196.45 from Rs230.26.

Similarly, the rate of light speed diesel has been decreased by Rs34.71 per liter to Rs191.44 from Rs226.15.

READ MORE: FPCCI demands 10% cut in petroleum prices

Although the Shehbaz led coalition government reduced the above prices ahead of by-election in Punjab but the PML-N failed to attract masses.

The PML-N secured only four seats out of 20 showing its failure. This has also strengthened Imran’s statement for conducting general elections without any delay.

July 18, 2022
Revised power tariff, taxes on electricity bills in Pakistan

KARACHI: Various changes have been made to rates of electricity and tariff structure in Pakistan that are effective from July 2022 under the governing laws, rules, and regulations of the Government of Pakistan and NEPRA.

The revises rates are applicable nationwide including on consumers in KE’s service territory.

The determination of costs of electricity to be recovered from consumers across Pakistan in their bills comes under jurisdiction of NEPRA and the Government of Pakistan.

READ MORE: K-Electric, Siemens sign deal for KKI Grid construction

These changes include the non-extension of relief for zero-rated industries as well as the relief on peak-hour electricity consumption for industrial consumers. The retailer tax with revised slabs has been introduced for commercial consumers. Non-Time of Use residential consumers will also see a revision in their applicable tariff along with a change in the methodology for their calculation.

Protected and Unprotected Consumers

As per SRO 1004 dated 7th July 2022, the tariff rates and slab structure for tariff of unprotected non-ToU residential consumers (i.e. consumers with sanctioned load below 5kW) has changed.

READ MORE: Rupee devaluation severely affects KE’s profitability

“Protected” consumers, as per tariff terms proposed by GoP under its Power Subsidy Rationalization Plan and by NEPRA as those non-ToU residential consumers with monthly electricity usage of 200 units or less, consistently for the past 6 months. All other non-ToU residential consumers fall in unprotected category.

Previously, category of unprotected consumers were provided the benefit of one previous slab in their billing (i.e. their billing was done in two slabs), which has now been removed. Consumers in the unprotected category will now only be charged on one slab in which their units fall. Accordingly, tariff rates have also been adjusted downwards to minimize impact on consumers.

Industrial Customers Bills

Industrial consumers were previously being provided a relaxation by Government of Pakistan, allowing them to utilize electricity during peak hours at the same rates as off-peak hours. That relief was allowed until June 2022 and accordingly with no further extension. Peak rates would now be applicable on industrial consumers as well.

READ MORE: KE’s profit up by 161% on high tariff adjustment

Similarly, zero-rated (or export-oriented) industries were being provided electricity at a fixed rate of USD 9 cents/unit, which was applicable till June 2022, has now been removed. Now, these industries will be charged as per applicable tariff rates to normal industrial consumers.

In addition to the above charges, it must also be noted that routine charges under FCA will be applicable in July bills within KE’s service territory.

Retailer Tax for Commercial Consumers

Per the Government of Pakistan Finance Act 2022 applicable across the country, retailer tax on unregistered retailers have been revised and effective from 1st July 2022. For consumers on commercial tariff, a minimum fixed tax of PKR 3,000 will be charged for bills between PKR 0 and PKR 30,000. Monthly bills between PKR 30,001 and PKR 50,000 will be taxed PKR 5,000, while those with monthly bills above PKR 50,0001 will be taxed PKR 10,000.

Important to note that inactive income taxpayers will be charged twice the taxable amounts.

Further, these taxes will apply even if the consumer’s premises are not in use.

Fuel Charges Adjustments (FCA):

READ MORE: K-Electric to raise Rs12 billion through Sukuk

Unprecedented hikes in the price of furnace oil and RLNG were translating into higher costs of electricity production for utilities, and higher costs of electricity for consumers as well. Under the tariff mechanism determined by NEPRA, incremental costs of fuel are recovered from consumers in their bills via Fuel Charges Adjustments (FCA) after the regulator’s scrutiny and approval. Within the decision for FCA, regulator also states that in which month FCA is to be charged. For example, FCA of March 2022 was charged in the month of June 2022.

Accordingly, in its determination for the month of April 2022, NEPRA has allowed KE to charge PKR 5.2718 per unit for units consumed in April 2022 to be billed in the month of July 2022. Further, NEPRA has allowed the FCA for May ’22 be recovered in two parts with PKR 2.6322 per unit charged in July and the remaining PKR 6.8860 per unit in the bills of August ’22. This means customers will see two entries for FCA in their July bills i.e., FCAs for April and May, respectively.

Speaking about the changes, Spokesperson KE stated “We understand that our consumers may have a number of questions about these revisions. To assist them during this time, we have updated our website with frequently asked questions. To reiterate, these changes are introduced under the governing laws of the Government of Pakistan and the rules of the regulatory authority NEPRA and are applicable across the country.

July 18, 2022
Petroleum dealers decide not to shut down petrol pumps

KARACHI: Pakistan Petroleum Dealers Association (PPDA) on Sunday decided to call of shut down strike scheduled for July 18, 2022 on government’s assurance to increase the dealers’ margin.

PPDA on July 02, 2022 announced a complete shutdown of petrol pumps from July 18, 2022 in protest of rise in cost of doing business and falling dealers’ margin.

READ MORE: Dealers threaten shutting down petrol pumps from July 18

The government has assured the petroleum dealers to increase dealers’ commission by 100 per cent. The government has agreed to increase the dealers’ commission from Rs3.5 to Rs7 per liter.

The government also assured the petroleum dealers to increase margin by Rs3.5 on petroleum products per liter. The government discussed that the procedure for increasing the dealers’ margin would be notified later.

READ MORE: NA approves levy on petroleum products up to Rs50/liter

According to the sources, the government will increase the 50 percent of dealers’ margin on July 31, 2022 and the next 50 per cent would be increased on August 15, 2022.

July 17, 2022
New petroleum prices in Pakistan from July 15, 2022

ISLAMABAD: Pakistan on Thursday announced reduction in prices of petroleum products effective from July 15, 2022 after a massive decline observed in the prices of oil in international markets.
(more…)

July 14, 2022