Islamabad, June 18, 2023: Pakistan has taken significant measures to reduce its petroleum subsidy by 47 percent for the upcoming fiscal year 2023-24, according to official budget documents released recently.
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Pakistan’s Petroleum Import Bill Plunges by 22%
Islamabad, June 16, 2023 – The import bill for Pakistan’s petroleum group has experienced a significant decline of 22% due to falling international oil prices and reduced domestic demand.
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Daily petroleum prices in Pakistan for May 2023
Following the last update on May 1, the daily petroleum prices in Pakistan for May 2023 have remained unchanged, offering stability to consumers. The current prices will be effective until May 15, 2023.
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Pakistan’s import of petroleum products sees a 20% decline in 9MFY23
According to data released by the Pakistan Bureau of Statistics (PBS), the import of petroleum products has declined by 20% during the first nine months (July-March) of the current fiscal year 2022-2023.
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Petroleum import bill falls to $11.88 billion in 8MFY23
KARACHI: Petroleum import bill fell to $11.88 billion in first eight months (July – February) of fiscal year 2022/2023, according to data released by Pakistan Bureau of Statistics (PBS).
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Pakistan petroleum sales plunge by 19pc in 7MFY23
KARACHI: Pakistan sales of petroleum products have plunged by 19 per cent during 7MFY23 first seven months (July – January) fiscal year 2022-2023.
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Russia agrees to provide oil at discounted rate to Pakistan: minister
ISLAMABAD: Russia has agreed to provide oil at discounted rate to Pakistan, said Minister of State for Petroleum Dr Musadik Malik on Monday.
He termed his recent visit to Russia ‘very successful’ as the host country, in principle, had decided to provide crude oil, refined petrol and diesel to Pakistan at a discounted rate.
READ MORE: Pakistan unable to bear heavy energy import bill amid challenges to economy: PM
“In addition, negotiations with private sector companies of Russia have been initiated for procurement of Liquefied Natural Gas (LNG), while talks for long term contracts with public sector companies of Russia have also been initiated to get LNG from their new plants,” he said at a press conference.
During the visit, he said fruitful discussions were also held on gas pipeline projects including establishing of Pakistan Stream Gas Pipeline, commonly known North-South (Lahore-Karachi) Gas Pipeline, and another a ‘big gas pipeline’ to get the commodity from Russian hydrocarbon deposits.
READ MORE: SBP denies restricting import payment for petroleum products
Musadik Malik said an inter-governmental delegation of Russia, led by its Energy Minister, would visit Pakistan by January-mid [next month] to make progress on oil and gas sale-purchase agreements between the two countries.
Commenting on the current gas supply situation in the country, the minister said the local gas production was witnessing around 8-10 per cent decline annually and despite all these odds, the government had arranged extra gas for months of November, December and January as compared to the same months of the last year.
He said an effective monitoring system of gas supply to domestic consumers was in place, under which the Petroleum Division kept a vigil eye on the demand and supply of the commodity.
READ MORE: New petroleum prices in Pakistan effective from December 01, 2022
Musadik Malik said the gas companies had been directed to ensure gas supply, especially during ‘breakfast, lunch and dinner’ preparation timings i.e. 6-9 a.m., 12-2 p.m. and 6-9 p.m.
“The incumbent government is providing extra gas as compared to the last year, and monitoring the supply situation regularly,” he added.
However, he said there was a problem of poor infrastructure which created a gas pressure issue for the remote areas, which was being rectified on priority basis.
To bridge the demand and supply gap, the minister said the gas companies were providing more than 20,000 tons Liquefied Petroleum Gas (LPG) per month in the areas where gas-pressure issue and shortage prevailed.
READ MORE: Shell Pakistan signs ABHI for voluntary carbon compensation offer
He disclosed that Iran had announced to give Pakistan LPG worth two million pounds as ‘assistance,’ for which all formalities have been completed. He said the additional LPG would help ensure better gas supply to domestic consumers in December.
The minister was of the view that the government believed in providing sufficient energy to the industrial sector as it would help move the economic wheel at a fast pace, thus generating employment opportunities for youth and increasing the country’s exports.
Accordingly, he said the government was utilizing all available options and contacting different countries including Central Asian States to meet its energy requirements.
He highlighted the importance of exploiting the country’s indigenous oil and gas potential, saying that two new policies related to tight gas and revival of old hydrocarbon wells, were being worked out.
Musadik Malik said the country needed 8-10 per cent addition in energy efficiency, if it wanted to improve Gross Domestic Product (GDP) at the rate of 5-6 per cent annually.
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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.
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FBR collects Rs459 billion as sales tax on POL products in TY 2022
The Federal Board of Revenue (FBR) has reported a substantial growth in sales tax collection on the import of Petroleum, Oil, and Lubricants (POL) products during the tax year 2022, reaching an impressive Rs459 billion.
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Pakistan customs seals over 1,600 illegal petrol pumps during FY22
KARACHI: Pakistan Customs has sealed over 1,600 petrol pumps across the country in its drive against smuggled petroleum products.
The Federal Board of Revenue (FBR) in its performance report for the fiscal year 2021/2022 stated that Customs authorities initiated country wide operations against illegal POL outlets during the fiscal year.
READ MORE: FBR directs IR offices to avoid recovery in pending appeals
FBR said that during the operation Customs sealed more than 1600 illegal outlets with criminal proceedings against owners. This initiative helped increase in legitimate imports of POL products.
It said Pakistan Customs is the guardian of Pakistan borders against movement of contra band goods and is facilitator of bona fide trade.
READ MORE: FBR directs 85 big retailers to integrate businesses
Customs provides a major source of revenue to the Government of Pakistan in the form of taxes levied on the goods traded across the borders. It also helps to protect the domestic industry, discourage consumptions of luxury goods and stimulate development in the under-developed areas.
Following initiatives taken by the Customs Administration during the TY 2022:
First Ever Counter Smuggling Policy Laid out which is an excellent example of interagency co-operation.
Highest Ever Counter Smuggling Seizures made (FY 2021-22: Rs. 66 billion).
READ MORE: FBR issues one million tax notices to enforce compliance
Countrywide Operation against Illegal POL outlets (sealing of more than 1600 illegal outlets with criminal proceedings against owners), through which, legitimate imports of POL products saw sharp surge as compared to previous financial year.
Opening Pakistan to Central Asian Republics through simplification of Transit Procedures and Automated Clearance. Pak-Uzbekistan Transit Agreement has been finalized and deliberations have been started.
Ease of Doing Business Indicators improved by 28 percent from 136 to 108 in 2021, which is an “unprecedented improvement” resulting into efficient Cross Border Trade.
READ MORE: FBR unveils plan to achieve Rs7.47 trillion revenue collection target
Pakistan Single Window Act, 2021 enacted and its rules notified and expected to be roll-out in the coming months.
WeBOC has now been implemented at all sea-ports, dry-ports and land border stations.
Online Payments have been introduced for the traders wherein levy-able duty and taxes on import of goods are paid online through digital banking.
Risk Management System is part of WeBOC clearance which is continuously upgraded from time to time.
Automated Duty Drawback Payment System: In order to facilitate the exporters, the manual rebate approval system has been replaced with RMS based, fully automated / system-based processing of duty drawback payment without involving any human intervention. Under the automated system, the exports Good Declaration is termed as Rebate request.
Administrative Measures like auctions, recoveries, valuations etc have resulted in generation of Rs. 25 billion in FY 2021-22.