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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.

  • Pakistan petroleum prices to go up with sales tax imposition

    Pakistan petroleum prices to go up with sales tax imposition

    The prices of petroleum products in Pakistan will go up with the imposition of sales tax, which presently at zero per cent.

    Analysts AKD Research Tuesday stated that with the IMF consistently conveying concerns over possible shortfall on account of petroleum development levy (PDL), the government is looking towards a contingency plan by taking up additional taxation measures, for one, imposing full 17 per cent general sales tax (GST) on petroleum products.

    READ MORE: SSGC stops gas supply to industries under load management plan

    To note, sales tax collection from the previous fiscal year stood Rs107 billion, against Rs235 billion in the preceding fiscal year, reflecting a decrease of 54 per cent.

    With petroleum products sales remaining robust during fiscal year 2021-2022, the halving of the collection was due to sales tax being effectively zero during the second half of the fiscal year, since mid-January more specifically.

    READ MORE: Pakistan has sufficient stock of fuel to meet domestic demand

    Assuming moderate 8 per cent imposition (Rs16-20 per liter) of sales tax on retail fuel products, the government could fetch additional around Rs30 billion revenue monthly at these rates.

    Furthermore, the government is likely to take a major hit in the non-tax revenue department as well i.e. PDL as retail offtakes have continued to decline during first four months of the current fiscal year, down 22 per cent year on year (YoY).

    READ MORE: ECC approves raising petroleum levy to Rs50 per liter on RON 95

    Total collection during the four months were estimated at Rs115 billion against the budgeted target of Rs250 billion. To note, annual PDL collection target stands at Rs750 billion (Rs62.5 billion per month).

    Assuming unchanged trends in POL offtakes and similar rates, total PDL collections will end the current fiscal year at Rs350 billion, an overall shortfall of Rs400 billion.

    READ MORE: Petroleum sales decrease by 22% in four months of 2022-2023

    The analysts further said that assuming the government pushes through by imposing further levies/taxes, although inflationary, this target may be more achievable now compared to five months ago, as falling global oil/petroleum prices has given the authorities more space to work with without severely hurting end consumers.

  • SSGC stops gas supply to industries under load management plan

    SSGC stops gas supply to industries under load management plan

    KARACHI: Sui Southern Gas Company (SSGC) on Tuesday suspended gas to local industries for three and a half months effective from November 15, 2022.

    The gas utility in an announcement stated that as part of load management plan, gas supplies to all local industrial customers for their use for power generation are being suspended for three and a half months i.e. from November 15, 2022 to February 28, 2023.

    READ MORE: Pakistan has sufficient stock of fuel to meet domestic demand

    Moreover, 50 per cent reduction in supplies of export industrial units for their power generation shall also be carried out for the same period.

    The SSGC said that the decision had been taken in view of the widening demand and supply gas especially with arrival of winter.

    SSGC implements government of Pakistan’s gas load management plan whereby it gives top most priority to the domestic and commercial sector for supplying gas, especially those living in Balochistan where demand for gas increases manifolds due to space and water heating needs.

    READ MORE: ECC approves raising petroleum levy to Rs50 per liter on RON 95

    “This situation is further compounded by the fact that gas reserves are being fast depleted at an annual rate of 10 per cent that further places pressure on the company’s line pack system,” it added.

    The company said that these closure are in line with the contract already signed between SSGC and each individual industrial consumer that clearly states:

    READ MORE: Petroleum sales decrease by 22% in four months of 2022-2023

    “Gas supply will be provided by the company on ‘as and when available basis’ only during the period from March to November each year. The consumer will make dual firing arrangements to avoid loss of production as and when gas is not available during March to November and also during December to February when the company will keep the consumer’s gas supply disconnected at his cost, each year.”

    READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    The company further said that gas volume curtailed from this management would be diverted to domestic customers for them to cater their enhanced gas loads in context of the winter season.

    “Gas thus saved approximately 160 mmcfd gas thus saved will then be diverted to Balochistan where gas serves as lifeline for the majority of the population.”

  • Pakistan has sufficient stock of fuel to meet domestic demand

    Pakistan has sufficient stock of fuel to meet domestic demand

    ISLAMABAD: Pakistan has sufficient stock of fuel to meet the domestic requirement of the country, an official statement said on Tuesday.

    The statement has clarified the news reports circulated regarding fuel shortage. It said the reports are baseless and contrary to facts.

    On November 7, 2022 the petrol stocks are around 550,000 Metric Tons which is sufficient for 21 days and with regard to diesel the present stocks are 438,000 Metric Tons which is adequate for 15 days, based on Oil Companies Advisory Council’s (OCAC) stock position.

    PSO’s planned import of diesel for the month of November 2022 is around 220,000 metric Tons out of which one cargo is on the way to Karachi and is expected to arrive on November 12,2022 while cargoes of other OMCs are in line to meet the country’s planned demand.

    Keeping in view the above position, the stock in the country is sufficient to take care of current requirements, it added.

  • ECC approves raising petroleum levy to Rs50 per liter on RON 95

    ECC approves raising petroleum levy to Rs50 per liter on RON 95

    ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Friday approved increasing petroleum levy to Rs50 per liter on RON 95.

    Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over the meeting of the ECC at Finance Division.

    READ MORE: Petroleum sales decrease by 22% in four months of 2022-2023

    Federal Board of Revenue (FBR) presented a summary on increase in rate of Sales Tax on HOBC. It was conveyed that the rates of Sales Tax on POL products were reduced to zero from February 01, 2022, that put pressure on FBR’s efforts to achieve its revenue targets.

    Therefore, the ECC after deliberation allowed to increase petroleum levy from Rs 30 up to Rs. 50/Liter on RON 95 and above with effect from November 16, 2022, which is a luxury good being consumed by wealthy consumers in expensive vehicles.

    READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    Federal Minister of Planning, Development and Special Initiatives Ahsan Iqbal, Federal Minister for Power Khurram Dastgir Khan, 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, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Pasha, Federal Secretaries, Chairman FBR and other senior officers attended the meeting.

    READ MORE: OGDCL announces huge oil discovery at Attock

    Ministry of energy (Petroleum Division) submitted a summary on High Speed Diesel/ Gas oil premium and informed that due to difference of premium on import of HSD for importing OMCs and PSO, there is an unsustainable position for importing OMCs and smooth supply of HSD in the country. In order to ensure sustained supply/import security, the ECC after detailed discussion allowed premium on HSD subject to maximum capping at US$ 15/BBL for importing OMCs other than PSO for the months of November and December, 2022.

    The ECC also approved Technical Supplementary Grants of Rs. 5 billion for conduct of 7th population census.

    READ MORE: Electricity withholding tax not applicable on ATL domestic consumers

  • Petroleum sales decrease by 22% in four months of 2022-2023

    Petroleum sales decrease by 22% in four months of 2022-2023

    KARACHI: Sales of petroleum products have decreased by 22 per cent during first four months (July – October) of fiscal year 2022-2023, according to data released by Oil Companies Advisory Council (OCAC) on Tuesday.

    The date showed the sales of petroleum products fell to 6.15 million tons during first four months of the current fiscal year as compared with 7.85 million tons in the corresponding months of the last year.

    READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    Petrol sales fell by 18 per cent to 2.54 million tons during July – October 2022 as compared with 3.11 million tons in the same period last year.

    A massive decline of 26 per cent in sales of high speed diesel (HSD) has been seen during the period under review. The sales of HSD plummeted to 2.17 million tons during first four months of the current fiscal year as compared with 2.93 million tons in the same period of the last year. Similarly, furnace oil sales recorded a decline of 26 per cent to 1.19 million tons as compared with 1.60 million tons.

    READ MORE: OGDCL announces huge oil discovery at Attock

    Analysts at Arif Habib Limited said that total petroleum sales settled at 1.66 million tons in October 2022, depicting a decline of 17 per cent Year on Year (YoY) due to higher petroleum prices, lower FO-based power generation, and a plunge in automobile sales.

    Motor spirit (MS) witnessed a fall of 11 per cent YoY, to settle at 0.68 million tons in October 2022. Similarly, High Speed Diesel (HSD) volumes shrunk by 15 per cent YoY, to arrive at 0.71 million in October 2022. Whereas, Furnace Oil (FO) sales volumes plummeted by 37 per cent YoY in October 2022, to clock in at 0.20 million tons.

    Meanwhile, petroleum offtake showcased a MoM growth of 9 per cent during October 2022 amid mobility across the country post floods, commencement of sowing for Rabi season, and a decrease in MS and HSD prices.

    READ MORE: Electricity withholding tax not applicable on ATL domestic consumers

    Volumes of MS and HSD reported a jump of 8 per cent and 37 per cent MoM, respectively. However, FO sales dropped by 33 per cent MoM in October 2022.

    Company-wise analysis depicts that PSO’s offtake displayed a decline of 18 per cent YoY in October 2022 which was majorly contributed by a plunge in sales of MS, HSD and FO by 18 per cent, 11 per cent and 43 per cent YoY, respectively.

    READ MORE: Petroleum prices in Pakistan effective from November 01, 2022

    Similarly, sales of APL and SHEL plummeted by 16 per cent and 21 per cent YoY, respectively due to fall in sales of MS and HSD. Whereas, HASCOL reported a growth of 46 per cent YoY given higher MS and HSD sales.

  • Petroleum prices in Pakistan effective from November 01, 2022

    Petroleum prices in Pakistan effective from November 01, 2022

    ISLAMABAD: The government of Pakistan on Monday decided to keep the petroleum prices unchanged for next fortnight starting from November 01, 2022.

    Finance Minister Ishaq Dar announced the decision to keep the prices unchanged for next 15 days.

    “The government has decided to keep the prices of Petrol, High Speed Diesel, Light Diesel, and Kerosene Oil unchanged for next 15 days”, Ishaq Dar said.

    It was second straight announcement to keep the prices of petroleum products unchanged. Previously, on September 30, 2022 following changes in petroleum prices were announced:

    READ MORE: Pakistan keeps petroleum prices unchanged from October 16, 2022

    The rate of petrol has been reduced by Rs12.63 per liter to Rs224.80 from Rs237.43.

    The price of high speed diesel has been cut by 12.13 per liter to Rs235.30 from Rs247.43.

    The rate of Kerosene oil has been slashed by Rs10.19 to Rs191.83 from Rs202.02.

    The price of light diesel oil has been reduced by Rs10.78 to Rs186.50 from Rs197.28.

    The government has taken the latest decision amid challenges including long march initiated by leading opposition party and rising benchmark Brent crude rates in international markets.

    READ MORE: Pakistan sharply reduces petroleum prices from October 01, 2022

    The present coalition government led by PML-N is under immense pressure since coming into power in April 2022. This government is mainly criticized for sky rocket prices of all essential items bringing inflation to record levels. The present government had opportunity to attract masses by lowering petroleum prices.

    On the other hand, Imran Khan, Chairman, Pakistan Tehreek I Insaaf (PTI) launched long march on October 28, 2022 from Lahore demanded the present government to announce general election as the country on the brink of default and masses were witnessing the brunt of high prices.

    The present government has annoyed people through its last decision to keep the prices of petroleum products unchanged. Experts had opinion that the government had room to give benefit by slashing the prices.

    The experts believed that now the government would have fewer options to cut the prices of petroleum products due to rising global oil prices and depreciation in currency value at home.

    Benchmark US Brent soared to $95.77 per barrel as of October 28, 2022. The commodity witnessed an increase of over $5 during the month of October 2022.

    Pakistan is the net importer of petroleum products to meet the domestic demands. Oil import bill of the country went up to $4.86 billion during first quarter (July – September) of the current fiscal year as compared with $4.59 billion in the corresponding quarter of the last year.

    READ MORE: Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    On the other hand the rupee once against started depreciation due to political instability and falling foreign exchange reserves. Although, the SBP recently received $1.17 billion from the International Monetary Fund (IMF) to buffer its foreign exchange reserves and support the local currency. Yet the scheduled repayment gradually dry to foreign exchange reserves position.

    Most recently, the SBP again received $1.5 billion from the Asian Development Bank (ADB) to strengthen the foreign exchange reserves position. However, the repayment pressure and rising political noise the rupee unable to show resistance against the dollar.

    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.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

    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.

    The present government in the budget estimated to collect Rs855 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.

  • K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    KARACHI: K-Electric Limited, the electricity generation and supplier company, has declared huge after tax loss of Rs16.35 billion for the quarter ended September 30, 2022 massive jump of 144 per cent in revenue received through tariff adjustment.

    According to consolidated financial results for the quarter ended September 30, 2022, the company announced after tax loss of Rs16.35 billion as compared with the after tax profit of Rs2.88 billion in the same period of the last year.

    The company announced earnings per share at 59 paisas for the three months period ended September 30, 2022 as compared with EPS of 10 paisas in the same period of the last year.

    Board of directors of KE met on October 28, 2022 to approve the financial results.

    The company declared huge losses despite the massive jump in revenue from tariff adjustment. KE received Rs65.97 billion as tariff adjustment for the quarter ended September 30, 2022 as compared with Rs27.22 billion in the corresponding period of the last year, showing an increase of 144 per cent.

    Total revenue of the company recorded at Rs154.58 billion for the quarter under review as compared with Rs114.17 billion in the same quarter of the last year.

    Cost of sales increased to Rs146.53 billion for three months period ended September 30, 2022 as compared with Rs97.53 billion in the same period of the last year.

    Company official said that the difficult socio-political challenge both locally and at international fronts, have had a consequential impact on the macro-economic factors.

    The economic impact has reverberated through multiple channels, including commodity and financial markets, surging inflation, increasing policy rates and reduction in economic activity. Impacted by these challenges, the Company has observed a reduction in units sent-out by 8.9 per cent and the gross profitability of the Company declined significantly.

    The company operates under regulated tariff and as per current Multi-Year Tariff effective from July 01, 2016, no adjustment is provided to the Company in tariff for changes in sent-out and policy rates. Further, the Company observed increase in exchange loss by PKR 2.6 billion owing to devaluation of Pak Rupee and increase in impairment loss by PKR 4.0 billion against doubtful debts due to high inflation, increase in consumer tariff, high FCA and current economic conditions impacting consumers propensity to pay.

    The aforementioned factors along with increase in finance cost by PKR 3.4 billion mainly on account of increase in effective rate of borrowing and higher levels of borrowing due to non-payment of dues by Government entities, translated into the loss after tax amounting to PKR 16.3 billion.

    The Company is geared up to face the challenges and focusing extensively on further operational improvements as detailed in the relevant business section and also working diligently for renewal of tariff for the next control period starting from July 01, 2023, with an aim to obtain a sustainable cost reflective tariff with robust adjustments mechanism at par with other power sector entities to ensure continuity of reliable and smooth service to consumers at least possible costs.

  • Pakistan reviews petroleum prices for next fortnight amid PTI’s long march

    Pakistan reviews petroleum prices for next fortnight amid PTI’s long march

    ISLAMABAD: Pakistan is set to review petroleum prices on October 31, 2022, as the government is facing challenges including long march initiated by leading opposition party and rising benchmark Brent crude rates in international markets.

    The present coalition government led by PML-N is under immense pressure since coming into power in April 2022. This government is mainly criticized for sky rocket prices of all essential items bringing inflation to record levels. The present government has opportunity to attract masses by allowing sharp cut in petroleum prices for the next fortnight starting from November 01, 2022.

    READ MORE: Pakistan keeps petroleum prices unchanged from October 16, 2022

    On the other hand, Imran Khan, Chairman, Pakistan Tehreek I Insaaf (PTI) launched long march on October 28, 2022 from Lahore demanded the present government to announce general election as the country on the brink of default and masses were witnessing the brunt of high prices.

    The present government has annoyed people through its last decision to keep the prices of petroleum products unchanged. Experts had opinion that the government had room to give benefit by slashing the prices.

    However, the prices were kept unchanged from October 16, 2022 at the level of October 01, 2022. Previously, on September 30, 2022 following changes in petroleum prices were announced:

    The rate of petrol has been reduced by Rs12.63 per liter to Rs224.80 from Rs237.43.

    The price of high speed diesel has been cut by 12.13 per liter to Rs235.30 from Rs247.43.

    The rate of Kerosene oil has been slashed by Rs10.19 to Rs191.83 from Rs202.02.

    The price of light diesel oil has been reduced by Rs10.78 to Rs186.50 from Rs197.28.

    READ MORE: Pakistan sharply reduces petroleum prices from October 01, 2022

    The experts believed that now the government would have fewer options to cut the prices of petroleum products due to rising global oil prices and depreciation in currency value at home.

    Benchmark US Brent soared to $95.77 per barrel as of October 28, 2022. The commodity witnessed an increase of over $5 during the month of October 2022.

    Pakistan is the net importer of petroleum products to meet the domestic demands. Oil import bill of the country went up to $4.86 billion during first quarter (July – September) of the current fiscal year as compared with $4.59 billion in the corresponding quarter of the last year.

    On the other hand the rupee once against started depreciation due to political instability and falling foreign exchange reserves. Although, the SBP recently received $1.17 billion from the International Monetary Fund (IMF) to buffer its foreign exchange reserves and support the local currency. Yet the scheduled repayment gradually dry to foreign exchange reserves position.

    READ MORE: Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Most recently, the SBP again received $1.5 billion from the Asian Development Bank (ADB) to strengthen the foreign exchange reserves position. However, the repayment pressure and rising political noise the rupee unable to show resistance against the dollar.

    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.

    The present government in the budget estimated to collect Rs855 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 effective from September 21, 2022

  • OGDCL announces huge oil discovery at Attock

    OGDCL announces huge oil discovery at Attock

    KARACHI: Oil and Gas Development Company Limited (OGDCL) on Thursday announced huge oil discovery at Attock District, Punjab Province, Pakistan.

    The company shared the information of oil discovery with the Pakistan Stock Exchange (PSX) and London Stock Exchange.

    READ MORE: OGDCL discovers gas deposits at Kohat District

    In its communication, the company said that OGDCL being operator of Toot Mining Lease with 100 per cent working interest has made oil discovery from Lockhart Formation at Toot Deep-1 well which is located in Attock District, Punjab province, Pakistan.

    READ MORE: Latest petroleum prices in Pakistan

    Toot Deep # 01 well was spudded-in on December 25, 2022 and successfully drilled down to total depth at 5545 meters in Tobra Formation. Based on interpretation results of open hole logs data, Lockhart Formation has successfully tested oil at the rate of 882 Barrel per day and 0.93 million standard cubic feet per day (MMSCFD) gas at well head flowing pressure (WHFP) of 600 pounds per square inch (psi) at 32/64” choke size.

    READ MORE: Techaccess Pakistan hosts session on in power sector cybersecurity

    “This discovery has further extended the hydrocarbon play area in Pothohar basin, OGDCL being leading exploration and production company in Pakistan has adopted aggressive exploration strategies which has resulted in hydrocarbon discoveries.”

    This discovery will add to the hydrocarbons reserves base of OGDCL and contribute positively towards oil and natural gas production from indigenous resources of Pakistan, the company added.

    READ MORE: Lucky Cement installs 25.3 MW solar energy plant at Karachi

  • Electricity withholding tax not applicable on ATL domestic consumers

    Electricity withholding tax not applicable on ATL domestic consumers

    Domestic consumers of electricity are not subject to withholding income tax if their names are in the Active Taxpayers List (ATL).

    The Federal Board of Revenue (FBR) has issued updated withholding tax card 2022-2023 after incorporating amendments made through Finance Act, 2022 to the Income Tax Ordinance, 2001.

    READ MORE: Tax rates on goods, passenger transport vehicles during 2022-2023

    The FBR collects withholding tax on the electricity consumption under Section 235 of the Income Tax Ordinance, 2001.

    Following are the withholding tax rates and text of the Section 235:

    WITHHOLDING TAX RATES ON ELECTRICITY

    For commercial and industrial consumers:

    1. There will be no tax on gross amount of bill up to Rs500

    2. The rate of withholding tax shall be Rs10 per cent of the amount where gross amount of bill exceeds Rs500 but does not exceed Rs20,000.

    READ MORE: FBR notifies tax rates on brokerage, commission during 2022-2023

    3. The tax shall be Rs1950 plus 12 per cent of the amount exceeding Rs20,000 for commercial consumers. Rs1,950 plus 5 per cent of amount exceeding Rs20,000 for industrial consumers where gross amount of bill exceeds Rs20,000.

    For domestic consumers: (The tax is applicable on person not appearing on ATL)

    The rate of tax to be collected on domestic electricity consumption shall be: (i) zero percent the amount of monthly bill is less than Rs. 25,000; and (ii) 7.5 per cent if the amount of monthly bill is Rs. 25,000 or more.

    READ MORE: Non-ATL to pay 200% more tax on motor vehicle purchase during 2022-2023

    Section 235. Electricity consumption

    (1) There shall be collected advance tax at the rates specified in Division IV of Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial or domestic consumer:

    Provided that the provisions of sub-section (1) shall not apply to a domestic consumer of electricity if his name appears on the Active Taxpayers’ List.

    (1A) In addition to tax collectible under sub-section (1), there shall be collected tax at the rates given in the Division IV of Part IV of First Schedule from retailers and service providers as provided under section 99A of the Ordinance:

    Provided that the tax shall not be collectible under this sub-section if the tax has been collected from the person under sub-section (9) of section 3 of the Sales Tax Act, 1990 as provided in the general order issued under section 99A of the Ordinance.

    READ MORE: FBR notifies tax rates on prize bond, lottery winning during 2022-2023

    (2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    (3) Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax or that he has discharged advance tax liability under section 147 or whose entire income is subject to final tax regime or minimum tax regime under any provisions of this Ordinance other than this section.

    READ MORE: Tax rates for rental income from immovable property during 2022-2023

    (4) Under this section, —

    (a) in the case of a taxpayer other than a company, tax collected upto bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;

    (b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and

    (c) in the case of a company, tax collected shall be adjustable against tax liability.