LAHORE: Engr. Muhammad Ayub has officially assumed the charge of Managing Director of the National Transmission and Dispatch Company (NTDC), a statement said on Thursday.
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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.
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Petroleum prices kept unchanged for next fortnight
The government of Pakistan has decided to keep the prices of petroleum products unchanged during the next fortnight. The decision, made on Monday, entails absorbing a tax loss of approximately Rs2.77 billion.
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OGDCL discovers gas reserves in Balochistan
KARACHI: Oil and Gas Development Authority (OGDCL) on Monday announced gas discovery at Jandran X-04 located in District Barkhan, Balochistan Province.
The company said that the structure of Jandran X-04 was delineated, drilled and tested using OGDCL’s in house expertise.
“The well was drilled down to the depth of 1200m into Parh Limestone. Based on Wireline logs data, successfully DST was carried out in Mughal Kot Formation wherein the Well tested 7.08 Million Standard Cubic Feet Per Day (MMSCFD) gas and 0.55 Barrels Per Day (BPD) condensate with Well Head Flowing Pressure (WHFP) of 1300 Pounds Per Square Inch (Psi) at 32/64” Choke size.”
The OGDCL said that the discovery of Jandran X-04 is the result of aggressive exploration strategy adopted by the company. “It has opened a new avenue and would add to the hydrocarbon reserves of OGDCL and the country.”
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FBR reduces sales tax rates on petroleum products
ISLAMABAD: Federal Board of Revenue (FBR) has reduced the rates of sales tax on domestic supply of petroleum products.
The sales tax rates have been reduced in order to maintain the retail prices for end consumers applicable from the first fortnight of May 2021.
The FBR issued SRO 551(I)/2021 dated May 09, 2021 to amend SRO 57(I)/2016 dated January 29, 2016.
Following are the revised sales tax rates on petroleum products from May 01, 2021:
Motor spirit: 17 percent ad valorem
High speed diesel oil: 17 percent ad valorem
Kerosene: 15.44 percent ad valorem
Light diesel oil: 7.56 percent ad valorem
On April 30, 2021, a press statement was issued by the finance division:
“In line with the vision of the Prime Minister to provide relief to the consumers in the holy month of Ramazan, the Government has decided not to increase the prices of the petroleum products. The implementation of this proposal requires an adjustment in the rates of petroleum levy on all petroleum products and a reduction in sales tax as well in case of kerosene oil and light diesel oil.
It is pertinent to mention that the Government was not charging any Petroleum Levy (PL) on Kerosene and light diesel oil.
The cumulative revenue impact of the decision will be Rs. 4.8 billion.
The prices of petroleum products w.e.f 1st May 2021 are as follows: MS Petrol Rs.108.56/liter High Speed Diesel Rs. 110.76/liter Kerosene oil Rs. 80.00/liter Light Diesel Oil Rs. 77.65/liter
A uniform rate of sales tax at 17 percent was announced for all petroleum products through SRO 700(I)/2019 effective from July 01, 2019. However, this notification has been now amended.
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Payment to 12 IPPs withheld for NAB cases
ISLAMABAD: Economic Coordination Committee of the Cabinet (ECC) has approved payment of first installment to 35 Independent Power Producers (IPPs) out of total 47 whereas payment to the remaining 12 IPPs (under Power Policy 2002) may be withheld owing to the NAB investigation.
Federal Minister for Finance and Revenue Shaukat Tarin chaired the meeting on Wednesday. Power Division presented a summary before the ECC regarding release of first installment of payment to IPPs.
Secretary Power Division briefed the Committee about the recommendations of the sub-committee constituted during ECC last week.
“The ECC approved payment of first installment to 35 IPPs out of total 47 whereas payment to the remaining 12 IPPs (under Power Policy 2002) may be withheld owing to the NAB investigation,” according to as statement.
Federal Minister for Privatization Muhammad Mian Soomro, Federal Minister for Interior Shaikh Rashid Ahmad, Federal Minister for Economic Affairs Division Omar Ayub Khan, Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Muhammad Hammad Azhar, Federal Minister for Industries and Production Makhdum Khusro Bakhtyar, Federal for National Food Security & Research Syed Fakhar Imam, Federal Minister for Maritime Affairs Ali Haider Zaidi, Adviser to the PM on Commerce Abdul Razak Dawood, Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, SAPM on Finance and Revenue Dr. Waqar Masood, SAPM on Power & Petroleum Tabish Gauhar, Federal Secretaries, Chairman BOI and other senior officers participated in the meeting.
Governor State Bank of Pakistan Reza Baqir also joined through a video link.
Secretary Power gave a detailed briefing to the Committee regarding a draft summary for approval of arrangement for providing additional power from NTDC to K-Electric since April 2020.
The Secretary Power also raised the issue of non-payment for the additional power supply by K-Electric to Power Division.
After Detailed discussion, the ECC constituted a Sub-Committee comprising Federal Minister for Planning, Federal Minister for Energy, Federal Minister for Maritime Affairs and SAPM on Power to be headed by the Finance Minister to negotiate with the Karachi Electric for settlement of payment dispute amicably.
Power Division placed a summary before the ECC regarding tax on payments to the offshore supply contractors of Independent Power Producer(s) located in AJ&K.
The ECC considered and approved the summary to facilitate swift processing of such projects due to its strategic importance.
The ECC considered and approved a summary tabled by the Ministry of Industries and Production regarding exemption from duties and taxes for import of oxygen gas, oxygen gas cylinder and cryogenic tanks by oxygen concentrators / Generators / manufacturing Plants under respective Harmonized System (HS) codes for a period of 180 days to cope with the increased requirement of oxygen during the third wave of COVID-19 in the country.
Ministry of Commerce presented a summary regarding implementation of United Nations Security Council Resolutions (UNSCRS) through export Policy Order, 2020 and Import policy Order, 2020.
The ECC considered and approved the summary.
Lastly, Power Division presented a summary before the Committee regarding retargeting of power sector subsidies for electricity consumers during phase-I in consultation with Ehsaas and Finance Division. The ECC approved the summary, in principle, with a direction to work out modalities for future course of action.
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PPL commences commercial gas production from Shah Bandar Block
KARACHI: Pakistan Petroleum Limited (PPL) on Tuesday announced start of commercial gas production from a block located in the province of Sindh.
PPL, the operator of the Block 246-16 (Shah Bandar), announced the commencement of commercial gas production from Benari Development & Production Lease (Benari D&PL) in Shah Bandar Block with effect from May 03, 2021.
The block is located in district Thatta and Sujawal, Sindh and lies in the southernmost part of the lower Indus basin.
PPL had announced discovery of gas from this block on December 08, 2018.
Benami X-1 well in Benari D&PL is the first exploratory well drilled in Shah Bandar block which is operated by PPL with 63 percent working interest along with its joint venture partners, Mari Petroleum Company Limited (MPCL) having 32 percent working interest, Sindh Energy Holding Company Limited (SEHCL) and Government Holding Private Limited (GHPL) with 2.5 percent working interest each.
Shah Bandar Joint Venture decided to process gas from Benamri D&PL at MPCL’s operated Sujawar Gas Processing Facility for onward injection in to SSGC network.
The expected gas production from the field is round 9 MMSCFD. “This arrangement has resulted in early commercialization of gas from Benari D&PL, which will add additional hydrocarbons enabling the energy sector to reduce the demand and supply gap of natural gas in the country.”
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FPCCI expresses concerns over approval to RLNG power plant
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday voiced strong concerns regarding the federal government’s approval of a 1263MW power plant to be run on imported RLNG. This plant, being developed by Punjab Thermal Power Ltd in Jhang, has sparked significant debate over its economic and environmental implications.
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Renewable energy projects avail financing Rs36bn for producing 850MW
KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) has said that as of February 2021 financing of around Rs36 billion have been extended for 521 projects producing approximately 850 MW.
He was addressing a webinar jointly hosted by SBP and Unilever Pakistan to create awareness about the SBP’s Renewable Energy Financing Scheme which has been used by Unilever to convert 30 percent of its factories to renewable energy
Dr Reza Baqir has said thatfinancing for sustainable development is the need of the hour and Financial Institutions have a crucial role in this area.
Dr. Baqir stated that the Pakistan faces challenge as a result of climate change and adopting prevention strategies are of paramount importance.
In this regard he pointed out that the SBP has issued Financing Scheme for Renewable Energy with a view to promote renewable energy projects.
Governor Baqir highlighted the key features of the scheme that can be beneficial for the stakeholders ranging from the corporates to the individuals. The scheme has evolved over time and received strong response and Dr. Baqir urged participants to benefit from this facility.
Pakistan is member of Global Sustainable Banking Network (SBN) since2015 and green/ sustainable finance policies are being aligned with global environmental and social standards and best practice.
Chairman and CEO of Unilever Pakistan, Amir Paracha in his address said that the Renewable Energy Financing Scheme offers tremendous social and business value to companies and producers both in terms of their environmental footprint and cost savings ambitions.
The financing scheme in Pakistan has enabled them to fast-track their renewable energy goals whilst remaining financially feasible. He mentioned that Unilever is sharing this as a best practice for other corporate players, as its sustainability in its best form. They are benefitting the country and environment whilst their own business has seen a positive impact.
SBP’s Renewable Energy Financing scheme is an innovative solution that aims to encourage investments for clean energy in Pakistan. This is part of the country’s efforts to diversify the energy mix and reduce climate change impact.
The scheme offers varied financing options ranging from Rs400 million to Rs6 billion for a range of entities and persons. This includes captive energy units as well as commercial projects and individual consumers who may share excess production with the national grid.
The SBP issued its Financing Scheme for Renewable Energy in 2016 and based on positive feedback the scheme was revised in July 2019. SBP also introduced a Shariah compliant version of this Scheme in August 2019.
The scheme aims at meeting Pakistan’s growing electricity demand through renewable energy and promoting clean energy projects as part of Sustainable Development Goals (SDGs).
It promotes the use of indigenous resources such as wind, solar and hydro to generate electricity as well as encourages the use of renewable energy at consumer level to support NEPRA’s Net Metering Regulations.
As part of this financing scheme, Unilever availed a loan of Rs833 million through Standard Chartered Bank to set up 8.85 MW of renewable energy production facilities across four factories in Punjab. This effort is in line with Unilever’s global mission for carbon neutrality and sustainability in its manufacturing process.
Unilever has committed to remove carbon emissions from operations by 2030, as well as net zero emissions from their products by 2039, which will be 11 years ahead of the 2050 Paris Agreement.
The renewable energy solution was implemented by Reon Energy Limited, producing 13 million KW units of energy per year, resulting in annual savings of PKR 182 million and a reduction in 5,075 tons of CO2 emissions. The impact of projects such as the one implemented by Unilever prove the benefits of adopting renewable energy solutions by the wider industry in Pakistan.
The webinar was attended by various chambers, media organizations, Presidents and CEOs of banks, energy experts, representatives of Pakistan Business Council and senior officials from SBP.
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PBC recommends key reform measures for energy sector
KARACHI: Pakistan Business Council (PBC) has recommended the government a set of reforms for bringing improvement in the energy sector.
The PBC sent its recommendations to the federal minister for industries and production and proposed key reform measures for the energy sector:
• Federal government to restrict its role to removing the existing bottlenecks in power transmission infrastructure and to ensure that the merit order in generation is maintained;
• Implement the terms of the MOU reached with IPPs to reduce the capacity charges and complete the renegotiation with those IPPs yet to be addressed;
• Utilize excess generation capacity through marginal pricing to promote industrial use, also to generate economic activity;
• Either privatize or transfer management of government owned Gencos (which are not due for retirement) to technically qualified private sector companies on an incentive for loss mitigation/incremental profit generation. Facilitate this through adequate protection from NAB and build appropriate safeguards on asset stripping and forced dismissal of employees;
• Move to multi-seller/multi-buyer arrangements, allowing market dynamics to set the price for both generation and distribution of electricity;
• Permit wheeling of electricity;
• Establish power/energy commodity exchange(s) for transparent pricing;
• Transfer all government owned Discos to the provinces at no cost;
• Provinces to establish Public Private Partnerships to operate the Discos on prescribed performance improvement incentives;
• Give consumers choice in the last mile of distribution. The GoP should set an example of this in the federal capital where it owns the Islamabad Electricity Supply Company (IESCO). Provinces and – KE can follow, the latter after its exclusivity expires in 2023;
• Unbundle KE post its exclusivity period. In the meantime, expedite the resolution of constraints affecting long term investment in safe and reliable supply of power to the country’s largest city and commercial centre. In doing so, also rectify the harm done to Pakistan’s image as an FDI destination;
• Phase out the country-wide uniform pricing formula so that the more efficient DISCOs can supply at a lower cost to consumers and provinces are able to use this to attract industry;
• Remove all “cross subsidies” e.g., from industrial / commercial to residential consumers – The government can provide targeted cash transfers to the most deserving population segment via the Ehsaas program;
• Any properly justified new capacity addition to be allowed only on renewables, without any take-or-pay sovereign guarantees;
• Retire all inefficient and costly generation plants in the public sector;
• Consider facilitating the conversion and deployment of existing coastal furnace oil plants for seawater reverse osmosis desalination;
• Promote renewables, especially for off grid use;
• Fast-track additional LNG terminals, storage and transmission to meet the shortfall between demand and supply of gas;
• Use the Ehsaas programme to subsidize gas to the deserving population. Right price gas to promote conservation;
• Incentivize conversion of domestic cooking and heating to electricity or other fuels such as LPG etc.;
• Aggressively promote energy conservation.
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Domestic oil sales surge by 57pc in April
KARACHI: Sales of oil marketing companies (OMCs) recorded 57 percent increase in April 2021 over the same month of the last year.
The sales of petroleum products were at 1.67 million tons in April 2021 as compared with 1.07 million in the corresponding month of the last year.
Analysts at Topline Securities said that Pak OMCs sales increased by 13 percent MoM in April 2021, wherein sales of High Speed Diesel (HSD) rose by 47 percent MoM due to harvesting season of Wheat crop.
Excluding HSD, sales of other petroleum products are likely to witness a decline of 7 percent MoM due to onset of the month of Ramadan, which generally limits economic activities and shortens working hours in the country.
On a YoY basis, sales of petroleum products are likely to increase by 57 percent YoY due to low base in April 2020 as economic activities (mainly public/private transport) were hindered due to COVID-19 led lockdown.
This takes 10MFY21 sales numbers to clock in at 15.8mn tons, up 18 percent YoY due to 48 percent YoY growth in Furnace Oil (FO) sales as its usage in private sector power generation has increased due to expensive grid electricity.
In petrol (MS) segment, PSO remained the star performer as the company gained 250bps in market share during April 2021 to 44.7 percent. During 10MFY21, company’s share in petrol segment has improved by 350bps to 42 percent and in HSD segment has improved by 370bps to 47.4 percent.
HASCOL remained the top laggard as market share in petrol segment touched a 6.7 year low of 2.7 percent in April 2021. Compared to April 2020, market share of company in April 2021 is down by 780bps.
In HSD segment, market share of HASCOL touched more than 7-8 years low and fell below 2 percent (at 1.9 percent). Compared to April 2020, market share of company has dropped by 370bps.