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.

POL prices increased for next fortnight; per liter petrol up by Rs5.4 to Rs118.09

ISLAMABAD: The government on Thursday announced increase in petroleum prices to be implemented midnight with effect from July 16, 2021 for next fortnight.

The government announced an increase of Rs5.4 to Rs118.09 in price of petrol from Rs112.69.

Likewise, the prices of high speed diesel increased by Rs2.54 per liter, from Rs113.99 to Rs116.53; kerosene oil by Rs1.39 per liter, from Rs85.75 to Rs87.14 whereas the price of light diesel oil increased by Rs1.27, from Rs83.40 per liter to Rs84.67 per liter.

The Oil and Gas Regulatory Authority (OGRA) had recommended Rs11.50 increase in per liter petrol, however the Prime Minister, considering to provide maximum relief to the public allowed only Rs5.4 liter increase, said a press statement issued by the Finance Ministry here.

In this way, the government observed Rs6.10 price hike in the commodity, it added. “The government has been providing maximum relief to the consumers by reducing the price of the petroleum products since April 2021,” it added.

The statement said that although the international oil prices have been on rise, the government took the decision not to pass on the entire burden of increase to the consumers.

The rates of sales tax and petroleum levy have been adjusted in a manner that maximum relief is provided to the consumers.

July 15, 2021
FBR drafts rules for warehousing, export of POL products

ISLAMABAD: The Federal Board of Revenue (FBR) has drafted rules for bonded warehousing and export POL Products.

The FBR issued SRO 872(I)/2021 on Friday and proposed amendments to Customs Rules, 2001. The FBR invited recommendations on the draft rules from stakeholders before finalizing the rules to make part of the law.

Following new rule 363A has been suggested regarding bonded warehousing and export of POL products:

(1) The owner may store any imported POL products in a warehouse and export the same in accordance with rules 363A to 363F.

(2) At the time of arrival of goods at a port, the owner shall file goods declaration through WeBOC system for in-bonding of the imported POL products submitting the documents as required under the Act.

(3) The securities in the shape of postdated cheques and indemnity bond furnished by the owner under section 86 of the Act, at the time of warehousing of POL products, shall continue to be in force notwithstanding the transfer of the goods to any other person or firm unless the warehoused POL products are exported by way of supply to conveyances as provisions and stores as provided in section 106 of the Customs Act, without payment of any duties, taxes or levies, as the case maybe.

Explanation / Note: Since the POL products, to be imported under this scheme, will be shipped or supplied without foreign exchange remittances from Pakistan, on account of cost of goods at the time of their imports, therefore, no Electronic Import Form (EIF) shall be required at the time of filing of GD for their in-bonding. Similarly, no EIF shall be required at the time of export. The owner of any POL products, warehoused in accordance with the foregoing provisions of this rule, may export such POL products as provisions and stores for conveyances proceeding to any foreign territory including by way of direct sale or sale through a third party.

Explanation / Note: ‘direct sale’ — means that owner makes a direct sale to the owner or charterer of the conveyance and deliver the POL products to such conveyance. ‘Sale through a third party’ — means that the owner will:

(i) issue sales invoice to a foreign entity other than the owner or charterer of the conveyance; and

(ii) deliver POL products to a conveyance on the instructions of such foreign entity.

July 10, 2021
Petrol price increases by Rs2 to Rs112.69/liter

ISLAMABAD: The government on Wednesday announced an increase in price of petrol by Rs2 to Rs112.69 per liter from Rs110.69 with effect from July 01, 2021.

A statement said that the price of high speed diesel (HSD) has been increased by Rs1.44 to Rs113.99 per liter from Rs112.55.

The price of kerosene oil has been increased by Rs3.86 to Rs85.75 per liter from Rs81.89.

Similarly, the price of light diesel oil has been increased by Rs3.72 to Rs83.40 per liter from Rs79.68.

The statement said that in order to provide maximum relief to the consumers, the government has maintained the practice of keeping the prices of petroleum products at an affordable level.

OGRA has been recommending substantial increase in the prices of Petroleum products since 1st May 2021, corresponding to the increase in prices of the petroleum products in the International markets.

However, keeping in view the welfare of the general public, the government has absorbed the impact of the increase by making adjustments in sales tax and petroleum levy.

Currently, the petroleum levy rates are at the lowest of last six years.

During the financial year 2020-21, the government has provided Rs252.41 billion subsidy to the consumers by keeping low the petroleum levy rates against the budgeted Rs. 30/liter on all products.

It is also worth mentioning that as compared to our regional neighbours, Government of Pakistan is providing Petrol and Diesel at the lowest level rates.

June 30, 2021
Kamran Kamal appointed HUBCO chief

KARACHI: Hubco, Pakistan’s largest IPP has announced the appointment of Kamran Kamal as its new CEO. Kamran has succeeded Khalid Mansoor who led the company for eight years, a statement said on Wednesday.

Kamran has already been a part of Hubco for the past 6 years as the CEO of Laraib Energy Limited, a hydel subsidiary of the Company. Previously, he held the position of Vice President China Power Hub Generation Company (CPHGC), a joint venture between HUBCO & China Power International Holding (CPIH). Kamran’s appointment as the new CEO (from within the Company) is a testament of confidence of Hubco’s shareholders in its home-grown talent.

“Pakistan’s energy landscape is full of possibilities. HUBCO’s unparalleled technical expertise, pioneering approach to business and strategic geographical presence provides us with a unique set of capabilities to realize these possibilities for our country said Kamran Kamal. I am excited to lead HUBCO in transforming our approach to creating long-term shared value without ever losing sight of the future of our society, Kamran added.

Kamran is a competent leader with over 18 years of progressive responsibility and leadership experience in energy, infrastructure, commodities, business development and strategy. He has been responsible for large capital projects, building organizational capabilities and for overall business delivery in both management, executive and Board roles. Kamran holds a Masters from Harvard and a BSE in Electrical Engineering from Georgia Tech, USA.

Previously, Kamran was Commodities Trade Head, Engro EXIMP FZE where he managed Fertiliser, Coal, Oilseeds and Sugar Trading Portfolio. He led the company’s growth into new geographies and commodities portfolio. During his tenure at Engro, Kamran was also involved in major energy & infrastructure projects including Thar Coal Mining & Power Plant, LNG Floating terminal and RLNG based power plant.

Under Kamran’s leadership HUBCO will focus on retaining its position as a market leader by focusing on renewables, merchant market model for the Power Sector and diversification into sustainable solutions. Kamran’s understanding of the Power Sector, regulatory environment and his experience of closely working with key external stakeholders will strengthen Hubco’s standing in the power sector.

June 30, 2021
NCCPL excludes Hascol Petroleum from list of eligible securities

KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Monday excluded M/s. Hascol Petroleum from the list of eligible securities after the stock exchange placed the oil company into defaulter segment.

The NCCPL said that this is with reference to Pakistan Stock Exchange Notice No. PSX/N-781 dated: June 25, 2021, regarding placement of M/s. Hascol Petroleum Limited (“HASCOL”) in the Defaulter’s segment with effective from Monday, June 28, 2021.

This event leads to action under Clauses 7A.3.5 and 7B.3.1.4 of NCCPL Regulations, 2015 that has been reproduced below for ready reference;

“Where a Security that has been quoted on the defaulter’s segment of the Exchange and notified to the Company, such Security shall not be eligible for trading in the SLB Market from the date it has been placed on the defaulter segment. However, all open SLB Contracts shall be released on Accelerated Maturity Date and/or Maturity Date as the case may be.”

“In case where such Security is reinstated during the review period, trading in SLB Market shall not be allowed during that review period.” (Regulations 7A.3.5)

“Where a Security that have been quoted on the Defaulter segment of the Exchange and notified to the Company, such Security shall not be made available on MF Market from the date it has been placed on the defaulter segment. However, all MF (R) Transactions shall be released as per the terms and conditions defined in the Margin Financing Agreement between MF Participants.”

“In case where such Security is reinstated during the review period, trading in MF Market shall not be allowed during that review period.” (Regulations 7B.3.1.4)

Where a MT Eligible Security that have been quoted on the defaulter segment of the Exchange and notified to the Company, such Security shall not be eligible for trading in the MT Market from the date it has been placed on the Defaulter segment. However, all open MT Contracts shall be released on Accelerated Maturity Date and/or Maturity Date as the case may be.

In case where such Security is reinstated during the review period, trading in MT Market shall not be allowed during that review period. (Regulations 7C.3.2 (15)

Accordingly, in pursuance of provisions stipulated in the above referred clauses of NCCPL Regulations, 2015, M/s. Hascol Petroleum Limited shall be excluded from the list of SLB Eligible Securities, MF Eligible Securities and MTS eligible Securities with effect from Monday, June 28, 2021.

June 28, 2021
FBR announces reduction in sales tax rates on petroleum products

ISLAMABAD: Federal Board of Revenue (FBR) has announced reduction in sales tax rates on supply of petroleum products in order to ensure availability of fuel at lower rates.

The FBR issued SRO 807(I)/2021 dated June 26, 2021 for notifying the reduction in sales tax on petroleum products.

According to the SRO the sales tax rate on kerosene oil has been reduced to 6.7 per cent from 9.15 per cent. Similarly, sales tax on light diesel oil has been reduced to 0.2 percent from 2.74 per cent.

However, the sales tax rates on petrol and high diesel oil has been kept unchanged at 17 per cent.

The government on June 15, 2021 announced increase in prices of petroleum products for next fortnight, which are as follows: MS (Petrol) has been increased by Rs2.13 from Rs108.56 to Rs110.69 per liter, High Speed Diesel was increased by Rs1.79 from Rs110.76 to Rs112.55 per liter, Kerosene (SKO) was increased by Rs1.89 from Rs80.00 to Rs81.89 per liter and Light Diesel Oil was increased by Rs2.03 from Rs77.65 to Rs79.68 per liter.

FBR sources said that the sales tax rate has been reduced because the government had not passed on the actual increase in petroleum products prices to the general public.

June 27, 2021
Mari Petroleum board decides consortium to set up NewCo in Abu Dhabi

KARACHI: The board of directors of Mari Petroleum Company (MPCL) on Thursday decided that a consortium of public limited energy giants shall incorporate a company namely NewCo in Abu Dhabi Global Market or Pakistan.

The company in a notice sent to the Pakistan Stock Exchange (PSX) said that the Board of Directors of MPCL, in its meeting held today i.e. June 24, 2021 has decided that subject to shareholders’ approval, a consortium comprising Mari Petroleum Company Limited (“MPCL”), Pakistan Petroleum Limited, Oil and Gas Development Company Limited, and Government Holding (Private) Limited (collectively referred to as the “Consortium”), shall incorporate a company/special purpose vehicle (a “NewCo”), in Abu Dhabi Global Market or Pakistan, with each Consortium partner having 25% shareholding in the NewCo.

The Consortium has submitted a bid for one of the blocks offered in the Abu Dhabi Bid Round 2019 and incorporation of the NewCo is one of the conditions precedent to qualify for the award: It is hereby clarified that the award shall be granted by the Supreme Council for Finance and Economic Affairs (SCFEA) of the Emirate of Abu Dhabi, and that no decision in this regard has so far been made. In case the block is not awarded to the Consortium, the NewCo shall be dissolved.

Further, subject to the approval of respective shareholders and the Consortium being declared a successful bidder by SCFEA, the incorporation of the NewCo and execution of all definitive agreements, an amount of up to USD 100 million will be invested by MPCL over a period of five years (total investment by all Consortium partners: Up to USD 400 million). Any subsequent funding, if required, will be subject to seeking shareholders’ and relevant approvals.

In addition, subject to approval of their respective shareholders, MPCL (and other members of the Consortium) are required to provide a parent company guarantee for all obligations of the NewCo under the definitive agreements to Abu Dhabi National Oil Company and SCFEA.

June 24, 2021
Petroleum prices increased for next fortnight

ISLAMABAD: The federal government on Tuesday announced increase in prices of petroleum products for next fortnight effective June 16, 2021.

According to a notification issued by the finance division, the new prices of the petroleum products coming into effect from June 16, 2021, for the next fortnight, are as follow:

The price of petrol has been increased by Rs2.13 to Rs110.69 per liter from Rs108.56 per liter.

The price of high speed diesel oil (HSD) has been increased by Rs1.79 to Rs112.55 per liter from Rs110.76 per liter.

The rate of kerosene oil has been increased by Rs1.89 per liter to Rs81.89 per liter from Rs80 per liter.

Similarly, the rate of light diesel oil has been increased by Rs2.03 to Rs79.68 per liter from Rs77.65 per liter.

June 15, 2021
Sales tax rates slashed on kerosene, light diesel

ISLAMABAD: The government has announced cut in sales tax rates on kerosene oil and light diesel in order to absorb the price hike on petroleum products.

In this regard the FBR issued SRO 726(I)/2021 on Tuesday to comply with the decision of the government for keeping the POL prices intact by absorbing a hike in prices through downward adjustment in sales tax rates.

The sales tax rate on kerosene oil has been reduced to 10.07 percent from the previous rate of 15.44 percent. Similarly, the sales tax rate on light diesel oil has been reduced to 3.67 percent from 7.56 percent. Meanwhile, the sales tax rates on petrol and high speed oil have been kept unchanged at 17 percent.

According to an official statement issued on May 31, 2021, the prime minister had decided to maintain the prices of petroleum products as they were on May 17, 2021.

“The government has not increased the prices of petroleum products since April 16, 2021 by adjusting sales tax and petroleum levy so that there is no corresponding increase in the prices of essential items and maximum relief is provided to the common man.”

June 8, 2021
KE privatization was policy mistake

KARACHI: Privatizing an integrating and monopoly provider of an essential service (i.e. electricity) to over 20 million people was a policy mistake, said a letter written by an advisor to the Prime Minister on Power and Petroleum.

Tabish Gauhar, Special Advisor to the PM on Power and Petroleum, in his response to a letter written by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) stated that unbundle K- Electric (formerly Karachi Electric Supply Company) into separate generation, transmission and (more than one) distribution companies as opposed to handing over its management to yet another single buyer of an integrated utility company i.e. an unbundled KE should be managed by different set of private entities going forward to avoid monopoly control and single point of management failure or success.

“In hindsight, privatizing an integrated and monopoly provider of an essential service (i.e. electricity) to over 20 million people was a policy mistake,” Tabish Gauher said.

In response to FPCCI President, it is further stated that prior to unbundling, reduce the overall cost of electricity for KE (and, therefore, the implied subsidy burden on the government) by integrating its own generation units and its Independent Power Producers (IPPs) into the national network on the basis of economic order dispatch.

“This will also help absorb the excess and relatively cheaper power available in the national grid/pool for the benefit of the entire power sector (lower circular debt), consumers of Pakistan (lower tariff) and reduce the need for KE to set up additional, more expensive, power plants and its own and create space on its balance sheet to finance the augmentation of the Transmission and Distribution network,” it said.

“… our government has already started doing that by increasing power supply to Karachi from the national grid from 650MW to up to 2000 MW, subject to signing a commercial-based power purchase agreement that is still pending,” it added.

The letter sent to FPCCI president further noted that the ministry supported the recommendations presented by various industrial associations to provide choice of retail supply to all the KE’s end-consumers once its exclusivity / monopoly expires in 2023, as in other DISCOs, in line with government’s power liberalization policy.

May 31, 2021