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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.

  • Mari Petroleum board decides consortium to set up NewCo in Abu Dhabi

    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.

  • Petroleum prices increased for next fortnight

    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.

  • Sales tax rates slashed on kerosene, light diesel

    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.”

  • KE privatization was policy mistake

    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.

  • Ayub assumes charge of MD NTDC

    Ayub assumes charge of MD NTDC

    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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  • Petroleum prices kept unchanged for next fortnight

    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.

    (more…)
  • OGDCL discovers gas reserves in Balochistan

    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.”

  • FBR reduces sales tax rates on petroleum products

    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.

  • Payment to 12 IPPs withheld for NAB cases

    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.

  • PPL commences commercial gas production from Shah Bandar Block

    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.”