Sugar import: tender amended 'to facilitate' only Dubai-based party
Posted by imdurrani Labels: inflation, Pak Economy, pakistanGovt committed to increase tax to GDP ratio: Tarin
Posted by imdurrani Labels: Pak Economy, pakistanISLAMABAD/KARACHI (APP) - Federal Minister for Finance, Shaukat Tarin reiterated government s commitment to increase tax to GDP ratio with the support of the business community and assured the Business Persons Council (BPC) members that FBR will provide full support to address their concerns. The Minister stated this while chairing the first meeting of the Business Persons Council (BPC) here on Friday. He briefed them about government s Nine Points Agenda and the actions he is taking to address the issues faced by the industry and agriculture sectors. The BPC is represented by businesspersons from various business sectors covering all four provinces, including ICT and FATA. The BPC members appreciated the initiative of the President and the Prime Minister to form such a council and congratulated Shaukat Tarin, for his continuous efforts for initiating such a forum to bridge the gap between business community and the government. During the meeting, the members discussed with the Finance Minister their business related problems and impediments which need government s immediate attention including energy, infrastructure and taxes structure of the economy. Shaukat Tarin appreciated the members of BPC for their valuable input. He reiterated his commitment to increase tax to GDP ratio with the support of the business community and assured the BPC members that FBR will provide full support to the business community to address their concerns. Shaukat Tarin briefed the BPC on government s Nine Points Agenda and the actions he is taking to address the issues faced by industry and agriculture sectors. He also stressed the need for Public-Private Partnership on permanent basis. The participants showed confidence on the policies of stabilization and growth being undertaken by the government. It was felt that the dialogue in the forum would help in better policy formulation and implementation. The meeting decided that business community would be taken into confidence on policy issues. It was further decided that the BPC would hold its meetings on monthly basis and the President and the Prime Minister would be requested to co-chair the meeting of the council every third month. Private sector representatives were asked to send their suggestions and feedback to Ministry of Finance prior to the next meeting. Launch of Pakistan remittance initiative Shaukat Tarin, Federal Minister for Overseas Pakistanis, Dr Farooq Sattar and Governor SBP, Syed Salim Raza will inaugurate Pakistan Remittance Initiative on Saturday here at State Bank s Headquarters.. Don't forget to visit finance.kalpoint.com for latest stories...Saturday, August 22, 2009
Saturday, August 22, 2009 KARACHI - The circular debt of PSO is mounting and the company is facing Rs 2 billion losses per day, as the power sector, the major buyer of furnace oil, is defaulted in payback to PSO. At present, outstanding dues from HUBCO, KAPCO, PEPCO and PIA stand at Rs 91,788b, The Nation learnt from sources. The source added that WAPDA has to pay Rs 28,536b; HUBCO has to pay Rs 36,398b and KAPCO to pay Rs 19,522b to PSO. OGDC has to pay Rs. 371m, Kohinoor Energy Rs 548m and Saba Energy has to give Rs 616m. The financial charges receivable from PIA now mounted up to Rs 684m and the audited price differential claim is Rs 2,757b, which the PSO has to receive. Due to increasing demand of FO for the power generation sector, PSO has been supplying 35,000 MT of furnace oil per day. The government has directed PSO to fulfil the demand of furnace oil in power sector in order to control the power crisis in the country. But by doing so, the circular debt is increasing, which is alarming for the company, the source added. The company was assured by the government that the issue of circular debt of power sector would be resolved in August. But PSO is still waiting for the amount in its account. If the issue of circular debt is not solved, the financial condition of PSO will be more deteriorated than it is at present, he said. It is worth noting that the price of furnace oil has been surged up record high during this year due to higher consumption. The price of furnace oil is Rs 44,064 per MT to Rs 46,944 per MT, which was Rs 41,521 per MT to Rs 44,044 per MT. This hike in price occurred within a month of August, bringing much defaulting burden on the company. On increased power generation through FO, an energy sector expert commented that in this situation it is worth considering that why the power generation has been shifted to thermal generation, as it is proved to be the most expensive one. This has not only affected the financials of oil company, it will also affect the power tariff. It would not be possible for the government to continue supplying electricity on same rate, people should expect power tariff hike in coming days. Even government realises that this way of power production is costly but still it is going for the short-term solutions of power production. The alternate means of power generation should be considered for long-term solutions. Rental power plants will only add more financial burden on the government and on the fuel sources of the country. It is no way in the favour of our current financial condition to increase the oil import bill to many folds by moving toward thermal power generation. The government should consider the aftermaths of the introduction of rental power plants in the country. PSO s sales volume grew of furnace oil has been up by over 10.2pc which enabled the company to enhance its market share appreciably from 82.3pc in FY08 to 85.8pc FY09. This actually demonstrates company s ability to meet the rising furnace oil demand from the power sector. It is pertinent to mention here that during FY09, the loss after tax came to Rs 7 billion versus profit after tax of Rs 14 billion during FY 08, mainly due to higher financial servicing cost and the inventory losses. The company registered Rs 18.9 billion on account of net inventory losses during FY09 as compared to inventory gains of Rs 11 billion during FY08. Don't forget to visit Finance.KalPoint.Com for latest stories...
Saturday, August 22, 2009 KARACHI - Pakistan Petroleum Limited (PPL) topline is expected to surge by 35.3 per cent to Rs 61.8 billion on year-on-year basis. The company has improved oil production by 2pc YoY to 4,130bpd in FY09, while the company s gas production is expected to decline by 3pc YoY. The surge in topline is due to increased wellhead gas prices by 50pc translating into net realised price of Rs168.79/mcf in FY09 for the company. The depreciating PKR/USD has also increased the income of PPL. Surge in oil production was primarily based on improved production from Mela field by 23pc YoY which mitigated the suppressed production from Adhi (-8pc YoY) and Makori (-12pc YoY). On the other hand, company s gas production is expected to decline by 3pc YoY to 962mmcfd on the back of lower production from Sui (-6pc YoY), Sawan (-10pc YoY) and Miano (-18pc). Royalty payments are expected to emulate the increase in the topline rising by 37pc YoY, to Rs7.5b.
On the exploration front, PPL remained inactive in its own-operated block as it scudded only 1 exploratory well (Tanga Pusht X-1) which was later abandoned while one developmental well (Sui-8) was in the process of drilling at the time of year end. It is expected that a 10pc increase in field expenditure as PPL s JV partners remained highly active in exploration and development activities. Owing to above factors, operating margins are expected to jump by 68.8pc. Furthermore, high interest rate environment is expect to bode positively on company s other income as they are forecasted to rise by 27pc to Rs3.8b. Therefore, PPL is expected to post a profit after tax (PAT) of Rs28.2b (EPS Rs 34.03), marking a growth of 43.3pc YoY. Likewise, the company is anticipated to announce a cash dividend of Rs5/share, which will translate into a cumulative annual payout of Rs15/share
KSE body rejects margin financing mechanism
Posted by imdurrani Labels: KSE, Pak Economy, Pak Stocks, pakistanLack of response to energy crisis disappoints US
Posted by imdurrani Labels: Asia, Pak Economy, pakistan, USSaturday August 22, 2009 Washington has expressed disappointment at Islamabad's un-preparedness to deal with the current energy crisis, saying Pakistan's response to address her energy problems so far has been sporadic, seeking silver bullet in gas imports from Iran and Turkmenistan pipelines and turning to expensive oil-fired rental power plants for the short-term, and requesting Saudi Arabia for free oil. Non-payment by customers and non-payment of government subsidies to producers and generators have resulted in a large stock of outstanding private and public debt (guaranteed by the government) totalling 4.6 billion dollars or two to three percent of the gross domestic product (GDP), which also prevents producers from purchasing sufficient fuel to operate at maximum rates, the document further discloses. Washington is of the considered opinion that if the government of Pakistan lives up to commitments per the Stand By Arrangement with the International Monetary Fund (IMF), a gradual tariff increase will be passed on to consumers and the government will begin immediately to pay subsidies to the sector. Don't forget to visit Finance.kalpoint.com for more stories...
These actions will improve the cash flow and show results with fewer blackouts rather soon. But it will be politically costly to Zardari in its initial stages. According to the document, the US government has instructed the USAID to develop a viable business plan for the electricity sector as soon as possible for the short-term assistance defined as within one-six month timeframe. The documents further states that a bilateral energy dialogue should be convened to discuss needed policy reforms with the Pakistan government's leadership. The dialogue would be an opportunity to roll out overall US approach on needed policy reforms and the US ideas on international support. "We could also present available technologies and gather the US business community to discuss opportunities and challenges in the Pakistan energy sector. For this, there is no need of additional funding," the paper admitted. Washington is also of the view that the IMF programme puts pressure on Pakistanis to rationalise finances in the energy sector.
Any alternative would continue to bust the budget. Programme eliminates, over time, both overt and hidden subsidies and transfers "circular" debt (resulting from the government policies) out of sector and on to government books. "We must ensure that the government of Pakistan follows through with the commitments to pay subsidies to the sector and that the money is used to boost power generation. "Active US Exim Bank, USTDA and OPIC may support the US companies, which are actively pursuing energy projects in Pakistan which include Virginia-based 'AES' plans in imported coal plant; "4Gas," an affiliate of the Carlyle Group, plans a facility to import liquefied natural gas for integration in the national grid; Oklahoma-based "Walters Co", plans a series of thermal plants nation-wide; and "Global Edison' plans, a gas-fired plant. "The US can announce a special energy finance initiative after seeking the appropriate buy-in from OPIC, USTDA and Exim. For this project, 10 million dollars will be needed as new funding, which could be taken from the FY10," said the paper.
Regarding allocation of funds for rural electrification in Fata and NWFP, the US emphasis is on microhydro and renewable energy to provide off grid, community-based hydro (similar to off grid programme in southern and eastern Afghanistan currently being funded at 100 million dollars). The project will require 25 million dollars, which will possibly be taken from the existing FY10 or pipeline funding to assist with transmission losses by improving the current generation/distribution companies. The USAID began its project to help improve consumer efficiency in April. It is currently developing the partnership and capacity for implementing its programmes. Additional funding could accelerate the process and help to identify any particular transmission bottlenecks. The cost of this project will also be 10 million dollars (or more) in additional funding.
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