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New petroleum prices in Pakistan from September 01, 2022

ISLAMABAD: Pakistan on Wednesday announced increase in prices of all petroleum products. These prices are implemented with effect from September 01, 2022.

The finance division notified the new prices of petroleum products with effect from September 01, 2022.

The price of petrol has been increased by Rs2.07 per liter to Rs235.98 from Rs233.91.

The price of high speed diesel has been increased by Rs2.99 per liter to Rs247.43 from Rs244.44.

READ MORE: Pakistan to increase petroleum prices from September 01, 2022

The rate of kerosene oil has been raised by Rs10.92 per liter to Rs210.32 from Rs199.40.

The price of light diesel oil has been increased by Rs9.79 per liter to Rs201.54 from Rs191.75.

It is important to note that the government revised the prices in the wake of falling international oil prices and massive recovery in rupee value.

The sources said that the government was striving to get loans under the Extended Fund Facility (EFF) from the International Monetary Fund (IMF). The government met all the conditions and received $1.16 billion from the IMF after it’s executive board accorded approval on August 29, 2022.

READ MORE: New petroleum prices in Pakistan from August 16, 2022

Pakistan is a net importer of petroleum products so huge foreign exchange is required for paying against foreign purchases and meeting local demand.

The country has spent a staggering amount of $23.32 billion for the import of petroleum group during fiscal year 2021/2022 as compared with $11.36 billion in preceding year, showing a growth of 105 per cent. The import of finished products recorded an increase of 134 per cent to $12.07 billion during the fiscal year 2021/2022 as compared with $5.16 billion in the preceding fiscal year.

The benchmark Brent crude is about $100 dollars. Brent crude futures were at $97.40 per barrel in New York trade on August 10, 2022.

The present government had started increasing the petroleum prices on May 26, 2022 when the benchmark Brent Oil was at $112 per barrel.

Considering the price slump of international oil, the government had reduced the prices of petroleum products from July 15 to July 31. However experts believed it was a political decision as the government had to increase petroleum levy and apply sales tax.

READ MORE: New petroleum prices in Pakistan from August 1, 2022

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 from July 15, 2022

September 1, 2022
Pakistan receives $1.16 billion from IMF

KARACHI: The State Bank of Pakistan (SBP) on Wednesday received $1.16 billion from International Monetary Fund (IMF) under Extended Fund Facility.

SBP in a Tweet said that it had received proceeds of $1.16 billion (equivalent of SDR 894 million) after the IMF Executive Board completed the combined seventh and Eight review under the EFF for Pakistan.

READ MORE: IMF board allows $1.1 billion disbursement for Pakistan

“This will help improve SBP’s foreign exchange reserves and will also facilitate realization of other planned inflows from multilateral and bilateral sources,” according to the Tweet.

Earlier, on August 29, 2022 the executive board of the IMF completed the combined seventh and eighth reviews of the Extended Arrangement under the EFF for Pakistan.

READ MORE: Pakistan may face food security due to flash floods

The Board’s decision allows for an immediate disbursement of SDR 894 million (about $1.1 billion), bringing total purchases for budget support under the arrangement to about $3.9 billion.

The EFF was approved by the Executive Board on July 3, 2019 for SDR 4,268 million (about $6 billion at the time of approval, or 210 percent of quota).

READ MORE: SBP issues IBAN list for donations to PM flood relief fund

In order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board approved an extension of the EFF until end-June 2023, rephasing and augmentation of access by SDR 720 million that will bring the total access under the EFF to about $6.5 billion.

READ MORE: Flash floods affect internet services in Pakistan

August 31, 2022
Dollar slips to PKR 218.75 at interbank closing on August 31, 2022

KARACHI: The US dollar slipped to Pakistan Rupee (PKR) 218.75 at the closing of interbank foreign exchange market on Wednesday.

The exchange rate witnessed an appreciation of Rs1.37 to end at Rs218.75 to the dollar from previous day’s closing of Rs220.12 in the interbank foreign exchange market.

READ MORE: Dollar falls to PKR 220.12 at interbank closing on August 30, 2022

Currency experts said that the market was remained optimistic due to resumption of bailout package by the International Monetary Fund (IMF).

On August 29, 2022, the executive board of the IMF completed its Seventh and Eighth review for Pakistan under the Extended Fund Facility (EFF) which is likely to lead to the release of $1.1 billion tranche. This will take total disbursement by IMF under the EFF program to $3.9 billion to Pakistan and will help support foreign exchange reserves of the country.

The rupee fell to the historic low of Rs239.94 against the dollar on July 28, 2022.

READ MORE: Dollar strengthens to PKR 221.92 amid political uncertainty

The currency market witnessed a non-stop depreciation in rupee value since the government lifted the ban on import of luxury and non-essential items. Besides, the prices of international oil are also seeing a rising trend.

The government on August 20, 2022 withdrew the ban on import of luxury and non-essential items. The government on May 19, 2022 imposed this ban in the wake of massive depreciation in rupee value and significant depletion of foreign exchange reserves.

The rupee witnessed a continuous decline against the dollar since the government lifted the ban. The local currency depreciated continuously during the week (August 22 – August 26) and fell Rs6.01 or 2.8 per cent during the period.

The currency experts said that the vertical decline in foreign exchange reserves also put pressure on rupee value.

READ MORE: Dollar surges to PKR 220.66 ahead IMF board meeting

Pakistan’s foreign exchange reserves fell by $91 million to $13.522 billion by the week ended August 19, 2022. The foreign exchange reserves of the country were at $13.613 billion a week ago i.e. August 12, 2022.

The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.703 billion.

READ MORE: Pakistani Rupee falls for 4th day; dollar climbs up to Rs219.14

The official foreign exchange reserves of the State Bank witnessed a decline of $87 million to $7.81 billion by the week ended August 19, 2022 as against $7.897 billion a week ago.

The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.336 billion.

August 31, 2022
OGDCL discovers gas deposits in Khyber Pakhtunkhwa

KARACHI: Oil and Gas Development Company Limited (OGDCL) on Wednesday announced discovery of gas deposits at Kohat district in the province of Khyber Pakhtunkhwa.

In a communication sent to the Pakistan Stock Exchange (PSX), the company said the TAL Joint Venture comprising MOL Pakistan Oil and Gas Co. B. V. (Operator), OGDCL (30 per cent working interest in exploratory phase), Pakistan Petroleum Limited (PPL), Pakistan Oilfield Limited (POL) and Government Holdings Private Limited Development and Production Lease (D&PL) in the Tolanj West-2 development well, which is located in district Kohat, Khyber Pakhtunkhwa Province.

READ MORE: Pakistan State Oil’s profit surges by 224% to Rs95.72 bn

OGDCL stated that the well was spudded-in on April 10, 2022 to produce already discovered horizon of Tolanj West D&PL i.e. Lumshiwal Formatino and to test Hydrocarbon potential of Lockhart & Shinwari & Samanasuk Formation (as exploratory targets). The well successfully drilled down to depth 4119.34m TVD.

“Based on interpretation results of wireline logs data, the deeper Samansuk and Shinwari Formations were tested successfully at rate of around 2.5 million standard cubic feet per day (MMSCFD) of gas through choke size 32/64” at Wellhead Pressure (WHFP) of 374 Pounds per square inch (Psi),” OGDCL said, adding that further testing operations are going to evaluate full potential of the well.

READ MORE: Hascol Petroleum announces rehabilitation plan

It further said that the new discovery had de-risked an exploration play in deeper reservoirs over Tolanj West D&PL and in TAL Block, leading to new upside opportunities. “The discovery will also help and contribute towards improving energy security of the county from indigenous resources and add to the hydrocarbons reserves base of MOL, its joint venture partners and the country.

August 31, 2022
FBR announces tax exemptions for flood relief operation

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday announced major tax exemptions for flood relief operation.

The FBR issued SRO 1634(I)/2022 dated August 30, 2022 to allow the tax exemption.

In order to enable the exemption, the FBR amended Second Schedule of the Income Tax Ordinance, 2001. It is pertinent to mention that tax is levied on imported goods under Section 148 of the Ordinance.

According to the amendment: “(123) The provision of Section 148 shall for a period of ninety days not apply to goods required and imported for relief operation for flood affectees, duly certified by the National Disaster Management Authority (NDMA) or the Provincial Disaster Management Authority (PDMA).”

The FBR issued another SRO 1635(I)/2022 dated August 30, 2022 to allow exemption from sales tax on goods imported for flood relief operation.

Sales tax exemption has been granted with effect from August 24, 2022 subject to the conditions and restrictions.

According to the FBR, import of all goods received, in the event of a natural disaster or other catastrophe, as gift and relief consignments or any goods received as gift or donation from a foreign government or organization by the federal or provincial governments or any public sector organization.

However, this exemption is subject to the same conditions as are envisaged for the purpose of apply zero-rate of customs duty under the Customs Act, 1969.

Through SRO 1636(I)/2022 dated August 30, 2022, which stated that the federal government has exempted for a period of ninety days the import and supply of the goods as certified by the NDMA or PDMA for relief operation for flood affectees, from the whole of the sales tax.

Similarly, SRO 1637(I)/2022 dated August 30, 2022 has been issued to exempt federal excise duty leviable on the goods as ceritifed by NDMA or PDMA for relief operation for flood affectees.

August 31, 2022
IMF board allows $1.1 billion disbursement for Pakistan

Washington, DC: Pakistan will get around $1.1 billion from the International Monetary Fund (IMF) after its executive board on Monday allowed immediate disbursement.

The Executive Board of the International Monetary Fund (IMF) completed today the combined seventh and eighth reviews of the Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan. The Board’s decision allows for an immediate disbursement of SDR 894 million (about $1.1 billion), bringing total purchases for budget support under the arrangement to about $3.9 billion.

READ MORE: Pakistan may face food security due to flash floods

The EFF was approved by the Executive Board on July 3, 2019 for SDR 4,268 million (about $6 billion at the time of approval, or 210 percent of quota). In order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board approved an extension of the EFF until end-June 2023, rephasing and augmentation of access by SDR 720 million that will bring the total access under the EFF to about $6.5 billion.

Pakistan is at a challenging economic juncture. A difficult external environment combined with procyclical domestic policies fueled domestic demand to unsustainable levels. The resultant economic overheating led to large fiscal and external deficits in FY22, contributed to rising inflation, and eroded reserve buffers. The program seeks to address domestic and external imbalances, and ensure fiscal discipline and debt sustainability while protecting social spending, safeguarding monetary and financial stability, and maintaining a market-determined exchange rate and rebuilding external buffers.

The Executive Board also approved today the authorities’ request for waivers of nonobservance of performance criteria.

READ MORE: SBP issues IBAN list for donations to PM flood relief fund

Following the Executive Board’s discussion on Pakistan, Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, issued the following statement:

“Pakistan’s economy has been buffeted by adverse external conditions, due to spillovers from the war in Ukraine, and domestic challenges, including from accommodative policies that resulted in uneven and unbalanced growth. Steadfast implementation of corrective policies and reforms remain essential to regain macroeconomic stability, address imbalances and lay the foundation for inclusive and sustainable growth.

“The authorities’ plan to achieve a small primary surplus in FY2023 is a welcome step to reduce fiscal and external pressures and build confidence. Containing current spending and mobilizing tax revenues are critical to create space for much-needed social protection and strengthen public debt sustainability. Efforts to strengthen the viability of the energy sector and reduce unsustainable losses, including by adhering to the scheduled increases in fuel levies and energy tariffs, are also essential. Further efforts to reduce poverty and protect the most vulnerable by enhancing targeted transfers are important, especially in the current high-inflation environment.

READ MORE: Flash floods affect internet services in Pakistan

“The tightening of monetary conditions through higher policy rates was a necessary step to contain inflation. Going forward, continued tight monetary policy would help to reduce inflation and help address external imbalances. Maintaining proactive and data-driven monetary policy would support these objectives. At the same time, close oversight of the banking system and decisive action to address undercapitalized financial institutions would help to support financial stability. Preserving a market-determined exchange rate remains crucial to absorb external shocks, maintain competitiveness, and rebuild international reserves.

“Accelerating structural reforms to strengthen governance, including of state-owned enterprises, and improve the business environment would support sustainable growth. Reforms that create a fair-and-level playing field for business, investment, and trade necessary for job creation and the development of a strong private sector are essential.”

August 30, 2022
FBR gets 3.38 million active taxpayers by August 28, 2022

ISLAMABAD: The Federal Board of Revenue (FBR) has issued a list of 3.38 million taxpayers on Monday through weekly updated Active Taxpayers List (ATL).

According to the latest ATL 3,376,699 taxpayers had filed their income tax returns by August 28, 2022 for tax year 2021.

READ MORE: Tax rates on mobile phone, internet users during 2022-2023

The ATL will also include names of those taxpayers who will file their income tax returns for the tax year 2021 in coming days till the ATL remained applicable.

The FBR issues ATL weekly basis on Monday to update the names of persons who filed their income tax returns during the week.

ATL provides taxpayers to get concession in payment of lower withholding tax rates or amount. The FBR issues ATL for the new tax year on the first day of March every year. Therefore, the existing ATL will prevail till February 28, 2023.

READ MORE: FBR launches campaign to ensure return filing by due date

According to the FBR the ATL is a central record of online Income Tax Return filers for the previous Tax Year.

It further says that ATL is published every financial year on the 1st March and is valid up to the last day of February of the next financial year. For example, Active Taxpayer List for Tax year 2020 was published on 1st March 2021 and will be valid till 28th February 2022. Similarly, Active Taxpayer List for Tax year 2021 will be published on 1st March 2022 and will be valid till 28th February 2023.

The ATL is updated on every Monday on the Federal Board of Revenue (FBR) website.

The FBR said that a person’s name will be part of the current ATL, if the Tax Return filed pertains to the Tax year of the relevant ATL. For example, to be part of the ATL published on 1st March 2021, a person must have filed a Tax return for the Tax year 2020. Similarly, to be a part of the ATL published on 1st March 2022, a person must have filed a Tax Return for the Tax year 2021.

READ MORE: FBR promotes 56 Inland Revenue Officers to BS-17

Restriction on including a person’s name on ATL, if the person has not filed Tax Return by the due date specified by Income Tax authorities was introduced through Finance Act, 2018. For example, to be part of the ATL published on 1st March 2022, a person must file a Tax Return by the specified due date for the Tax year 2021.

However, through Finance Act, 2019 a person’s name can be part of ATL, even if the person has filed Tax Return after the due date specified by Income Tax authorities.

Furthermore, a surcharge for placement on ATL after due date of filing of Tax Return will be charged as under:

Company: Rs20,000

Association of Persons: Rs10,000

Individuals: Rs1,000

A company or an AOP shall be included in the ATL, whose return is not to be filed due to incorporation or formation after 30th day of June relevant to the Tax year pertaining to the ATL.

READ MORE: FBR transfers six IRS officers of BS-19-20

Joint account holders as an entity shall be deemed to be part of ATL if any of the persons in the joint account have met the criteria of being included in the ATL.

Bank account held in the name of a minor shall be considered part of ATL if the parents, guardians of the minor or any person who has deposited money in minor’s account are deemed to have met the criteria of being included in the ATL.

August 30, 2022
Tax rates on mobile phone, internet users during 2022-2023

KARACHI: The Federal Board of Revenue (FBR) has issued amended income tax law to notify the tax rates on users of mobile phones and internet during 2022-2023.

FBR issued Income Tax Ordinance, 2001 updated up to June 30, 2022 incorporating changes made through the Finance Act, 2022.

READ MORE: FBR launches campaign to ensure return filing by due date

The revenue body collects these taxes under Section 236 of the Income Tax Ordinance, 2001.

Under this section, in the case of telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs1,000, then the tax rate shall be 10 per cent of the exceeding amount of bill.

Similarly, in the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card, the tax rate shall be 15 per cent of the amount of bill or sales price of internet pre-paid card or pre-paid telephone card or sale of units through any electronic medium or whatever form.

READ MORE: FBR promotes 56 Inland Revenue Officers to BS-17

According to the Section 236: Telephone and internet users.- (1) Advance tax at the rates specified in Division V Part IV of the First Schedule shall be collected on the amount of –

(a) telephone bill of a subscriber;

(b) prepaid cards for telephones;

(c) sale of units through any electronic medium or whatever form; and

(d) internet bill of a subscriber; and

(e) prepaid cards for internet.

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

READ MORE: FBR transfers six IRS officers of BS-19-20

(3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

(3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

(4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.

READ MORE: FBR issues paper return form for tax year 2022

August 29, 2022
Pakistan may face food security due to flash floods

ISLAMABAD: The flash floods in Pakistan may create a situation of food security in coming days as rice, banana, onion and other agriculture produces have been badly affected.

Minister for Planning, Development, and Special Initiatives Ahsan Iqbal Monday said that the recent floods and torrential rains have also damaged 40-50 percent cotton crop across the country.

He said Pakistan is witnessing more devastation than that caused by the flood in 2010.

READ MORE: SBP issues IBAN list for donations to PM flood relief fund

The minister informed that 0.9 million livestock and one million houses have been washed away in the recent floods while over 1000 people lost their lives.

The Minister made these remarks while speaking at the event titled, “an overview and findings of the Rural Poor Stimulus Facility (RPSF) – Waseel-e-Khurak, pilot project” that was organized by the Scaling Up Nutrition (SUN) in collaboration with Ministry of Planning Development & Special Initiatives.

In 2013, he said when the PML-N government took the charge, the country had already faced devastated floods in 2010 and it launched the fourth phase of Pakistan flood protection programme to minimize the impacts of such floods.

“In May 2017, we got approved the Programme from Council of Common Interest duly signed by all the provinces and it was agreed that new infrastructure would be built under the programme”, he added.

He said it was also agreed that Rs 177 billion would be spent under the Programme and the provinces would contribute half of the amount.

READ MORE: Flash floods affect internet services in Pakistan

However, he said despite completing the final roadmap to spend Rs 177 billion under the programme, the next PTI government dumped this programme in the cold storage and not a single rupee was spent on this programme.

Had we spent Rs 177 billion under the programme, the loss would be far less than what we are facing now, he added.
Ahsan Iqbal said a big challenge is ahead as the 30 million people have been affected and the government have to help them standing on their feet.

He expressed his resolve that under the leadership of Prime Minister Shehbaz Sharif, the government would complete the rehabilitation process of the flood hit areas.

August 29, 2022
Dollar strengthens to PKR 221.92 amid political uncertainty

KARACHI: The US dollar strengthened against Pakistan Rupee (PKR) to Rs221.92 on Monday as political uncertainty mounted ahead of IMF board approval.

The exchange recorded a decline of Rs1.26 to end at Rs221.92 to the dollar from last Friday’s closing of Rs220.60 in the interbank foreign exchange market.

READ MORE: Dollar surges to PKR 220.66 ahead IMF board meeting

The IMF board meeting is scheduled today August 29, 2022 which will discuss and likely to approve tranche for Pakistan under Extended Fund Facility (EFF).

The currency market witnessed uncertainty after alleged audio tape was leaked. The audio tape recorded discussions of former finance minister Shaukat Tarin and present finance ministers of Khyber Pakhtunkhwa and Punjab.

The rupee recorded an all-time low against dollar at Rs239.94 on July 28, 2022.

The currency market witnessed a non-stop depreciation in rupee value since the government lifted the ban on import of luxury and non-essential items. Besides, the prices of international oil are also seeing a rising trend.

READ MORE: Pakistani Rupee falls for 4th day; dollar climbs up to Rs219.14

The government on August 20, 2022 withdrew the ban on import of luxury and non-essential items. The government on May 19, 2022 imposed this ban in the wake of massive depreciation in rupee value and significant depletion of foreign exchange reserves.

The rupee witnessed a continuous decline against the dollar since the government lifted the ban. The local currency depreciated continuously during the week (August 22 – August 26) and fell Rs6.01 or 2.8 per cent during the period.

The currency experts said that the vertical decline in foreign exchange reserves also put pressure on rupee value.

Pakistan’s foreign exchange reserves fell by $91 million to $13.522 billion by the week ended August 19, 2022. The foreign exchange reserves of the country were at $13.613 billion a week ago i.e. August 12, 2022.

READ MORE: Dollar gains for third day, ends at PKR 218.38

The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.703 billion.

The official foreign exchange reserves of the State Bank witnessed a decline of $87 million to $7.81 billion by the week ended August 19, 2022 as against $7.897 billion a week ago.

The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.336 billion.

READ MORE: Dollar climbs up to PKR 217.66 at interbank closing

August 29, 2022