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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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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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.
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Prices of petroleum products kept unchanged
ISLAMABAD: The federal government on Friday decided not to increase the prices of petroleum products during next fortnight in order to provide relief to the consumers during the holy month of Ramazan.
A statement said that 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 May 01, 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
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PSO announces 5-time increase in net profit for nine-month period
KARACHI: Pakistan State Oil (PSO) has declared five-time increase in net profit for nine-month period ended March 31, 2021. The unprecedented growth may be attributed to reduction in cost of products sold during the period.
According to financial results for nine-month period ended March 31, 2021 submitted to Pakistan Stock Exchange (PSX), the company announced an amount of Rs18.24 billion during first nine months (July – March) 2020/2021 as compared with profit of Rs3.01 billion in the corresponding period of the last fiscal year.
The gross sales of the company fell to Rs1,008.7 billion during first nine months of the current fiscal year as compared with Rs1,038.01 billion in the corresponding period of the last fiscal year.
The cost of products sold significant fell to Rs815.22 billion during July – March of 2020/2021 as compared with Rs867.18 billion in the same period of the last fiscal year.
PSO declared gross profit of Rs37.7 billion during first nine months of the current fiscal year as compared with Rs20.14 billion in the same period of the last fiscal year.
Operating cost of the company was remained flat at Rs8.06 billion during first nine months of the current fiscal year as compared with Rs8.07 billion in the same period of the last fiscal year.
PSO declared earnings per share at Rs38.86 for the nine months period ended March 31, 2021 as compared with Rs6.41 EPS in the same period of the last fiscal year.
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PPL declares decline in net profit to Rs38.12 billion during nine months
KARACHI: Pakistan Petroleum Limited (PPL) on Thursday declared decline in net profit to Rs38.12 billion for the nine-month period ended March 31, 2021.
According to unconsolidated financial results submitted to Pakistan Stock Exchange (PSX), the petroleum company declared Rs38.12 billion during first nine months (July – March) 2020/2021 as compared with Rs39.23 billion in the corresponding period of the last fiscal year.
Revenue of the company fell to Rs112.23 billion during the period under review as compared with the revenue of Rs126.23 billion in the same period of the last fiscal year.
Operating expenses of PPL also eased to Rs32.45 billion during the nine-month period ended March 31, 2021 as compared with Rs33.04 billion in the same period of the last fiscal year.
The company paid royalties and other levies to the tune of Rs16.67 billion during first nine months of the current fiscal year as compared with Rs18.88 billion in the corresponding period of the last fiscal year.
Exploration expenses fell drastically during the period under review. The expenses under this head fell to Rs3.62 billion during July – March 2020/2021 as compared with Rs13.76 billion in the same period of the last fiscal year.
The net profit of the company for the quarter ended March 31, 2021 also fell to Rs11.88 billion when compared with Rs14.67 billion in the same quarter of the last year.
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K-Electric declares 222 percent growth in quarterly net profit despite massive impairment loss
K-Electric Limited (KE), a leading power generation and supply company, has reported an impressive 222 percent increase in net profit for the quarter ending March 31, 2021.
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Pakistan Refinery announces contraction in accumulative loss at Rs17.74 billion
KARACHI: Pakistan Refinery Limited (PRL) on Tuesday announced financial results for quarter ended March 31, 2021. The accumulated losses of the company contracted at Rs17.74 billion by March 31, 2021 as compared with loss of Rs18.36 billion by June 30, 2020.
In addition, current liabilities of the company exceeded its current assets by Rs14.49 billion as March 31, 2021 as against Rs16.84 billion by June 30, 2020.
The company ended the period with negative cash and cash equivalents amounting to Rs5.65 billion as against Rs10.19 billion on June 30, 2020.
The company said: “These conditions may cast significant doubt on the company’s liability to continue as a going concern and the company may be unable to realize its assets and discharge its liabilities in the normal course of business.”
The refinery further said that right issue of one ordinary share of every one share held amounting to Rs3.15 billion, announced in February 2020 to address negative equity and liquidity issues was completed during the period thereby increasing the share capital to Rs6.3 billion.
“Further, by changing crude recipe and operational philosophy during the current financial year, company was able to produce IMO-2020 grade Marine Residual Fuel (MRF), a premium product and Euro-II High Speed Diesel for a certain period that enabled the company to earn additional revenues,” it said.
However, sustainable production of above high premium products is tied with long term crude arrangements, it added.
The company’s ability to produce Petrol (MS) 92, 95 and RON has resulted in saving of RON differential price adjustment on MS and also generated additional revenues to the company during the period.
“All these efforts helped the company in earning profit after taxation of Rs621 million for nine-month period ended March 31, 2021 as compared with loss after tax of Rs6.77 billion in the same period of the last year.”
The company said: “Based on the cumulative impact of factors mentioned above, the company believes that it will continue as a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business.”
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NTDC sets up control center to monitor power supply during Sehr, Iftar and Traweeh
LAHORE: National Transmission and Dispatch Company Limited (NTDC) has setup Central Control Center at 220 kV grid station, New Kotlakhpat, Lahore to monitor and keep a close liaison with NPCC and all DISCOs during Sehr, Iftar and Traweeh, a statement said on Wednesday.
The monitoring cell has been established in compliance of directions of Ministry of energy (Power Division). The Central Control Center will monitor stability of the Power System.
Engr. Dr. Khawaja Riffat Hassan visited the control center and checked the arrangements. He said that the Central Control Center will work round the clock under the supervision of GM (Asset Management) North and dedicated team will look after continuous and uninterrupted power supply to all distribution companies throughout the country.
He said that in order to meet any emergency Regional Control Centers of Asset Management at Islamabad, Multan, Hyderabad & Quetta have also been established.
MD NTDC further said that in case of a fault at any Grid Station or Transmission Line of NTDC across Pakistan, the control center will monitor the team mobilisation and material directly and latest information will be shared with the Ministry of Energy (Power Division) and respective DISCOs.