Friday, September 11, 2009
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IMF tells India not to raise policy rate
Posted by imdurrani Labels: Asia, IMF, India, world financeIndia has exited from a gas pipeline deal it earlier planned with Iran and Pakistan, Mehr news agency reported citing Pakistani diplomat. “India has definitely quitted the IPI (India-Pakistan-Iran) gas pipeline deal,” the report said Sunday citing Pakistani ambassador to Iran, Muhammad Bux Abbasi. Iranian officials, however, said India has not yet officially declared its intention. In May this year, Tehran and Islamabad signed a $7.5-billion deal for supply of gas from Iran to Pakistan. As per the deal, Iran will initially supply 30 million cubic meters of gas per day to Pakistan which would be later increased to 60 million cubic meters per day. Iran, Pakistan and India had conceptualised the project in 1990s to help boost peace and security in the region, besides mitigating the power crisis. India stopped negotiations on the project due to tension with Pakistan, although Iran repeatedly encouraged New Delhi to rejoin the process, according to the report. The pipeline will run 2,775 km when linked with the three countries. The project would have greatly benefited India, which lacks sufficient natural gas to meet its rapidly increasing domestic requirements. Pakistan has been facing electricity shortfall of more than 3,000 megawatts and plans to generate 4,600 megawatts from Iranian gas. Islamabad has also been under pressure from Washington to abandon the deal.Tuesday, September 08, 2009
Japan suspends aid to Third World
Posted by imdurrani Labels: Asia, global finance, pakistan, world financeMonday, September 07, 2009 Visit Finance.KalPoint.Com for latest financial stories...
The channel said that Karachi Circular Railway (KCR) project is in jeopardy following the Japanese government decision.
Yen and dollar rise
Posted by imdurrani Labels: Asia, forex trading, US, World Currencies, world finance, world forex
The decline came despite upbeat economic news from the United States and euro zone as well as a stabilisation in Chinese shares after a rout on Monday. The hedge fund talk "is a huge driver" of currency markets, said Dan Cook, senior market analyst at IG Markets Inc in Chicago. "When you have data like we had but the Dow drops, people are running for that safe haven." In late afternoon trading in New York the dollar index, which tracks a basket of six major currencies, was up 0.7 percent at 78.747, rebounding from a session low of 77.944, according to Reuters data.
The dollar was down 0.1 percent against the yen at 92.89 yen, above Monday's seven-week low of 92.53, according to Reuters data. But the yen was up 1 percent against the Canadian dollar, 0.7 percent against the Swiss franc, 0.9 percent against the euro and 0.8 percent against the pound. The euro was down 0.8 percent against the dollar at $1.4212, well below a session high of $1.4377.
The US manufacturing sector expanded in August for the first time in more than a year and a half. The Institute for Supply Management's index of national factory activity rose to 52.9 from 48.9 in July. Separate data showed pending sales of previously owned US homes raced to a two-year high in July, further evidence the housing market was on a steady recovery path.
"Clearly, the US data is surprising to the upside," said Jack Iles, senior portfolio manager who helps manage $2.5 billion assets at MFC Global Investment Management in Boston. But despite a batch of upbeat US economic numbers, major currencies remained in ranges as investors continued to debate about the outlook for the global economy, analysts said.
NEW DELHI: India s exports fell for a 10th straight month in July as the country s key Western markets remained in the grip of the global economic downturn. Shipments overseas slid 28.4 percent to 13.6 billion dollars, data released Tuesday by the Commerce Ministry showed, while imports tumbled 37.1 percent to 31.2 billion dollars. The lower import figure mainly reflects lower oil costs due to the slide in crude prices, but it also shows the domestic economy remains sluggish. Exports for the first four months of the financial year to March 2010 were down 34.1 percent from a year earlier at 49.7 billion dollars. The data come days after India announced plans to boost trade with emerging markets in a bid to wean itself off dependence on economically struggling developed nations that buy more than 60 percent of its exports. The government has also announced a slew of steps such as cheaper finance, better infrastructure, tax relief and reduced transaction costs to spur shipments. The country is aiming for export growth of 15 percent over two years to achieve sales of 200 billion dollars by March 2011, up from 168 billion dollars for the year to March 2009. Wednesday, September 02, 2009
Commerce Minister Anand Sharma said he would be happy to sustain exports this year at last year s levels but economists say they are likely to contract by 10 percent. The government originally set a target of 200 billion dollars last year but was forced to lower that when the global economic crisis hit. Unlike China, where overseas sales have been a main growth driver, Shipments account for around 15 percent of gross domestic product in India s still relatively inward-looking economy.
SINGAPORE (AFP) - Assets held by the world s 100 biggest Islamic banks grew 66 percent in 2008 from the previous year despite the financial turmoil that clobbered mainstream lenders, a report said. The top 100 Islamic banks held assets totalling 580 billion US dollars last year, up from $350b in 2007, according to an annual report by The Asian Banker, a magazine for financial professionals. In the same period, Asia s 300 biggest banks saw their assets rise by a much slower 13.4 percent, it said. A financial storm sparked by a crisis in the US housing market swept across the world late last year. Its impact spilled over into the general economy and sent several countries into recession. Prominent US investment bank Lehman Brothers collapsed into bankruptcy, while several other major Western banks suffered massive losses. Despite the financial turmoil in late 2008 that crippled so many large Western institutions, Islamic banks have continued to grow in prominence and size, the magazine said in a press statement. Emmanuel Daniel, the magazine s president and chief executive, added: Islamic finance has seen an incredible surge in popularity, based on stronger regulatory regimes and a better international understanding of its dynamics. Monday, August 31, 2009
Thursday, August 27, 2009
Thursday, August 27 2009
A massive shortage in sugar stocks in India and Pakistan has led to soaring prices and consumer unrest, BBC reported on Tuesday. The Indian govt has introduced strict limits on companies that stockpile sugar to check rising prices. Shortages led Pakistan s government to nearly double sugar prices causing public outrage ahead of the fasting month of Ramadan. The price of raw sugar worldwide has increased to its highest level since 1981, as supply concerns grow.
China still faces challenges to recovery: planner
Posted by imdurrani Labels: Asia, China, global economy, world economy
"The serious fall in external demand is a pronounced problem for China's economy, and our country is still facing great pressure in the employment situation," Zhang told a session of the standing committee of parliament, according to state radio. Presenting a report on the economy's performance, he said domestic demand was still not strong enough a driver of growth, and that housing prices in some cities had risen by too much.
Zhang added the global economy would take a long time to recover from recession, and that improvement over the long run would involve many ups and downs along the way. The government would make efforts to increase domestic demand and stabilise exports, he said, without elaborating.
Indian rupee drops
Posted by imdurrani Labels: Asia, forex market, India, World Currencies, world forex
"There was only buying today. Even when Sensex was up 400 points yesterday, the dollar-rupee was bid. Today equities were negative for large part of the day, so one can imagine," said Madhusudan Somani, head of foreign exchange trading at Yes Bank.
"There was decent demand from oil companies, along with some month-end demand as well, keeping it bid. Lack of inflows completely skews the demand-supply picture, so the downside for the dollar-rupee is limited," he added. One-month offshore non-deliverable forward contracts were quoting at 48.80/90.
In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX closed at 48.7775 and 48.7850 respectively, with the total traded volume on the two exchanges at a high $2.2 billion.
Eight MoUs signed during Zardari's visit to China
Posted by imdurrani Labels: Asia, China, Pak Economy, pakistan
President Zardari during his four-day visit to Zhejiang and Guangdong provinces - China's two most prosperous models of economic development, not only witnessed the signing of MoUs particularly on power generation and agriculture, but also held a series of meetings with China's business giants.
The President invited a Chinese firm to visit Pakistan for coal gasification in Sindh and met Chinese Foreign Minister to discuss a host of bilateral, regional and international issues. Talking to journalists spokesperson to the President Farhatullah Babar said the centre piece of the President's visit was the memorandum of understanding signed particularly the one relating to the building of 7,000 MW hydro power in Bunji in the Northern Areas.
The project will be built on BOOT (build, operate, own and transfer) basis with total foreign investment. The MoU was signed by the Water and Power Ministry of the government of Pakistan and China's Three Gorges Project Corporation that has recently built the world's largest hydropower project in China capable of generating over 22,000 MW and a water reservoir spread overt 650 square kilometers.
During the visit, Pakistan also invited private companies in China engaged in building small and medium dams to bid for the construction of twelve small and medium dams the sites for which have already been identified in the four provinces. Five of the dams will be built in Balochistan, four in Sindh, two each in Punjab and Frontier, he said. A MoU on co-operation in drug regulation and production of hepatitis B and C vaccines was also signed during the visit.
The Sindh Agricultural University (SAU) in Tandojam and the South China Agricultural University (SCAU) in Guangzhou province also signed MoU for co-operation in agricultural research, plant protection and animal husbandry. The President also visited the Pearl River Fisheries Research Institute where another memorandum of understanding was signed for setting up of a model fisheries farm in Pakistan and also to train Pakistani fishermen in the latest techniques.
Lack 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.
Monday August 03, 2009
KARACHI: The Swiss investors in Pakistan are satisfied with their current business result and foresee further investments to consolidate their market position. This was stated by the Consul General of Switzerland in Karachi, Martin Bienz, in a message in connection with the Swiss National Day.
He also hosted a reception at the Consulate General of Switzerland here to mark the occasion. In his message, he pointed out that the Swiss Confederation was founded in 1291 when three rural cantons formed a historic alliance to protect their freedom. The Swiss Consul General further stated that the Swiss government, a long time bilateral donor, joined international efforts to provide assistance and participated in the Tokyo meeting of the Friends of Democratic Pakistan. Furthermore, multilateral agencies and NGOs engaged in relief operations receive financial support from Switzerland. He also pointed out that the long-standing bilateral relations between our two countries were initiated right after Pakistan s independence in 1947, when Switzerland immediately recognised the new state.
The year 2009 marks the 60th anniversary of Swiss diplomatic presence in Karachi. As a matter of fact, in 1949 Switzerland opened its first diplomatic mission in Karachi, which was then called Legation and subsequently became the Embassy. When the Embassy moved to Islamabad in 1968, the Consulate General of Switzerland opened its doors in Karachi to assure a continuous official Swiss presence in this important economic centre.During these six decades, our two countries have been working together in various domains, Martin Bienz. Bienz said that in the 1970s and 1980s, Switzerland concluded several debt-rescheduling agreements with Pakistan. The signing of a bilateral agreement on technical and scientific co-operation led to the opening of the Swiss Co-operation Office in Islamabad in 1977. Over the years, he added, a remarkable number of programmes have been implemented throughout Pakistan and today s focal points are income generation (poverty alleviation) and good governance.
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Japan may face deflation through 2011: IMF
Posted by imdurrani Labels: Asia, economy, global finance, IMF, world finance| Thursday July 16, 2009 |
| WASHINGTON: The International Monetary Fund on Wednesday said that Japan would likely wrestle with deflation through 2011 as it struggles to recover from severe recession. "Inflation is projected to remain negative until 2011," the IMF said in a report. The IMF sees prices falling 1.1 percent this year, 0.8 percent in 2010 and 0.4 percent in 2011. (AFP) |
SINGAPORE: Oil prices were up in Asian trade Thursday after a massive rally in US stocks stoked hopes of an early rebound for the global economy, analysts said.
New York's main futures contract, light sweet crude for delivery in August, rose 15 cents to 61.69 dollars a barrel.
Brent North Sea crude for August delivery advanced six cents to 63.15 dollars. The contract will expire later Thursday.
Analysts said oil prices were lifted by overnight gains on Wall Street, with the US Federal Reserve's improved outlook for the US economy giving an additional boost.
"It's the surge in technological and financial stocks on Wall Street that's spilling into the Asian equity markets," said Victor Shum, senior principal of energy consultants Purvin and Gertz in Singapore.
This pulled oil prices higher, he added.
"Oil market sentiment was buoyed by gains on US equity markets," the Commonwealth Bank of Australia also said in a report.
Wall Street closed strongly on Wednesday, spurred on by surprisingly good results from tech giant Intel and an improved outlook by the Federal Reserve for the world's biggest economy.
The US central bank raised its outlook for 2009 and 2010, projecting a rebound in the second half of 2009 that would leave the economic contraction for the year at between 1.0 and 1.5 percent.
Markets worldwide closely monitor the health of the US economy because of its role as a key engine for global growth.
A stronger global economy means more demand for oil to power industries and other economic activities, leading to higher prices.
(AFP)
Pak asks additional $4 billion in IMF loan
Posted by imdurrani Labels: Asia, IMF, Pak Economy, pakistan
Wednesday July 15, 2009
NEW YORK: Pakistan has asked some $4 billion in additional financing from the International Monetary Fund as an "insurance" against the economic crisis, a top Finance Ministry official said on Tuesday. "The world has not come out of recession, so I might as well have more insurance," Finance Ministry chief Shaukat Tarin told investors in an event organised by the Asia Society in New York.
Pakistan has already signed a $7.6 billion loan deal with the IMF in November to avert a balance of payment crisis. Now the South Asian country is requesting additional financing worth two times its quota, or $3.1 billion, plus $1 billion worth of capital increase in the fund, Tarin told Reuters on the sidelines of the event.
(Reuters)
SINGAPORE: Oil was higher in Asian trade Wednesday but any further sharp gains were likely to be capped by worries over weak US energy demand, analysts said.
New York's main contract, light sweet crude for August delivery, advanced 60 cents to 60.12 dollars a barrel after closing Tuesday 17 cents lower at 59.52 dollars, it’s lowest since May 18.
Brent North Sea crude for August delivery gained 74 cents to 61.60 dollars.
Keeping a lid on prices are expectations of another build-up in US oil stockpiles when the Department of Energy (DoE) releases its weekly inventory report later Wednesday, analysts said.
A Dow Jones Newswires poll of analysts expects the DoE report to show a 900,000-barrel rise in gasoline reserves in the week to July 10, indicating anaemic demand in the world's biggest economy and energy user.
"The world is facing a glut of oil," Morgan Stanley's commodity analysts said in a report.
Last week's DoE report also showed an increase in gasoline reserves, which are widely monitored at this time of year when the US summer holiday driving season kicks into gear.
Also likely to weigh on prices are comments by US President Barack Obama that he expects the unemployment rate, currently at 9.5 percent, to rise further.
"This has been a more severe recession than we've seen since the Great Depression," Obama said Tuesday, adding that the United States would "probably continue to see unemployment tick up for several months."
Uncertainty over the global economy, particularly the US, will weigh on commodity prices in the next few months, analysts from Barclays Capital said.
"While the long-term outlook for a broad range of commodities still appears positive, there is less certainty over the short-term," they said in a report.
"The commodity price rally is likely to prove very sensitive to any faltering in the economic recovery story."
(AFP)
Pak Rupee: Dollar at 82
Posted by imdurrani Labels: Asia, forex market, forex trading, pakistan, Pakistani Rupee, World CurrenciesKARACHI: The rupee has failed to come out of weak spells on rising demand by the importers, falling 25 paisa against dollar for buying and selling at 82.00 and 82.05, dealers said on the interbank market on Friday.
Increasing demand by importers, forced the rupee to come down versus dollar and it is most likely it may not be able to resist sharp losses for the near future, they said. In the final Asian session yen held steady, holding below the week's peaks with investors cautious as the US corporate earnings season gets under way, while euro lost ground against dollar and yen.
The yen hit a five-month high against dollar this week and surged to two-month highs against euro and Australian dollar as investors unwound bets in riskier assets that they made using the low-yielding Japanese currency.
Open Market Rates: The rupee drifted lower against the US currency, losing 20 paisa for buying at 82.00 and 25 paisa for selling at 82.30, dealers said. The rupee followed the same pattern in relation to euro, falling 46 paisa for buying and selling at Rs 112.84 and Rs 113.84, they said.
Buying Rs 82.00
Selling Rs 82.05
Interbank Closing Rates: Interbank Closing Rates For Dollar On Friday.
Open Buying Rs 82.00
Open Selling Rs 82.30
(BRecorder)
KSE amends Listing Regulations
Posted by imdurrani Labels: Asia, Karachi, KSE, Pak Stocks, pakistan, world stocksSaturday July 11, 2009
KARACHI: The Karachi Stock Exchange (KSE) has amended clauses 20 and 24 of Listing Regulations relating to annual general and annual review meetings, bonus share, default and delisting.
In a notice issued here on Friday, the KSE said that in exercise of the powers conferred under Sub Section (1) of Section 34 of the Securities and Exchange Ordinance, 1969, the Karachi Stock Exchange, with the prior approval of Securities and Exchange Commission of Pakistan has made the following amendments in its Listing Regulations. These amendments have been sent for publication in the Official Gazette of Pakistan.
1. EXISTING CLAUSE 20 SHALL BE SUBSTITUTED TO READ AS UNDER:
VI. Annual General Meetings/Annual Review meetings, etc.
20 (1) A listed company shall hold its annual general meetings and lay before the said meetings its financial statements within four months following the close of financial year.
(i) Each Modaraba shall hold an annual review meeting of its certificate holders and lay before the said meeting its financial statements within four months following the close of its financial year.
Provided that it shall be mandatory for a Company to notify the Exchange of any extension in time of holding the Annual General Meeting by furnishing to the Exchange a copy of the letter of approval from the Securities and Exchange Commission of Pakistan allowing such extension, within 48 hours of receipt of the same.
(2) Failure to hold the annual general meeting/annual review meeting in time or within the extension in time provided by the Securities and Exchange Commission of Pakistan and/or failure to notify the Exchange of any such extension shall make the company liable to penalty at the rate of Rs 5,000 per day for every day of the default. The Exchange may also notify the fact of such default and the name of the defaulting company by notice and also by publication of the same in the Daily Quotations of the Exchange.
(3) The Board may suspended/delist any company which makes a default in complying with the requirements of this regulation and/or fails to pay the penalty payable hereunder or imposed by the Exchange.
2. EXISTING CLAUSE 24 SHALL BE SUBSTITUTED TO READ AS UNDER:
24(1) A listed company shall issue bonus shares certificates within a period of 30 days from the date of reopening of the share transfer register closed for this purpose.
(i) the bonus shares shall be credited into the respective CDS Accounts of shareholders maintained with the CDC or dispatched to the shareholders concerned by registered post unless those entitled to receive the bonus share certificates require otherwise in writing;
(ii) the Exchange shall be immediately intimated as soon as the bonus shares are credited/dispatched to the shareholders;
(iii) A company which makes a default in complying with the requirements of this regulation shall be liable to pay a penalty at the rate of Rs 5,000 per day until the default continues and the Exchange may also take action of suspension of trading or delisting of the company.
Provided that in case of eligible securities deposited into the CDS, in addition to the above procedure as prescribed by the CDC shall also be complied with.
(2) No company which has been suspended or delisted, as the case may be, shall be restored and its shares requited on Exchange until it has paid the full amount of penalty for the days of the default and receives the assent of the Exchange for the restoration. It is further informed that the complete updated Listing Regulations of the Exchange are available on KSE website: http://www.kse.com.pk/KSE Regulations/Listing Regulations.
(BRecorder)
Saturday July 11, 2009
ISLAMABAD: The government has revived the unsuccessful E-10 (ethanol-10 and petrol 90 per cent) pilot project at a Pakistan State Oil (PSO) petrol pump here from Friday without giving incentives to the consumers.
The Economic Co-ordination Committee (ECC) of the Cabinet on May 19 allowed marketing of ethanol-10 motor vehicle fuel on trial basis at PSO stations on the insistence of Sindh-based lobby of sugar millers at a time when crude oil price in the international market was 140 dollars per barrel, said one prominent sugar mill owner on condition of anonymity on Friday.
"Now with its price down to almost 60 dollars per barrel, the project is no longer feasible," he added. Earlier Shaukat Aziz government had launched the pilot project of mixing ethanol with petrol on the same petrol pump located opposite the Ministry of Foreign Affairs, but the price of petrol at that time was lower than ethanol and the pilot project failed after six months. However, this time the project has been launched by Minister for Industries and Production Mian Manzoor Ahmad Wattoo.
Official circles are of the view that the decision to allow marketing of E-10 was taken to reduce reliance on imported petroleum products through the use of appropriate indigenous blendable substitutes. Anhydrous ethanol (ethanol with less than one percent water) is one such product, which can be blended with gasoline in varying proportions.
The sources said a subsidy of Rs 2.83 per litre for E-10 was also on the cards as the estimation was based on current prices and could change with the change in price of E-10. Molasses, a by-product in sugar production from sugarcane, was further processed in distilleries to produce ethanol, they said, adding that Pakistan was the seventh largest producer of sugarcane.
The production cost of one litre of ethanol is Rs 38.75 per litre. The estimated retail price of E-10 with current retail price of prime motor gasoline (PMG) will be Rs 57.66 per litre, which is nearly at par with the current price of gasoline.
Introduction of E-10 fuel at a time when international prices of crude oil have fallen drastically from 146.43 dollars per barrel in July, 2008 to 53.08 dollars per barrel in April 2009 may not appear economically viable (unless the price rises above 74 dollars per barrel), but the price of crude oil may increase again.
The blended fuel improves the combustion efficiency and reduces air pollution. Using E-10 would also provide energy security by gradually lowering reliance on fossil fuel.
The production of molasses in 1998-99 was 2.11 million tons, out of which 1.83 million tons was exported at an average price of Rs 1075.25 per ton. After a decade, molasses production rose in 2007-08 to 2.66 million tons, whereas exports declined to 80 million tons, and export price increased to Rs 4,471 per ton, an increase of 315.8 percent over the average export price per ton in 1998-99. Recently, the government has levied 15 percent regulatory duty on export of molasses.
The Industries Ministry has already been strongly criticised by Pakistan Sugar Mills Association (PSMA) and Ministry of Commerce (MoC) for attempting to increase recently imposed 15 percent regulatory duty on molasses in a blatant effort to benefit ethanol manufacturers.
The imposition of regulatory duty will harm trade relations between Pakistan and the European Union (EU), as exporters have finalised several memoranda of understanding (MoUs) with the EU partners and, therefore, the date of affectivity of the regulatory duty will have an impact on these agreements.
The sugar industry experts are of the view that imposition of RD on molasses export has negatively impacted on exporters, who will have to cancel deals with their European buyers, and renegotiate with them. The money earned from export of molasses was much higher than the ethanol manufacturers earned through so-called value-addition.
"The trend to shift the burden of one unproductive industry on another by imposing duty was unjustified," said one stakeholder. The sources said that the Industries Ministry, which was reportedly playing into the hands of the mafia, had also submitted a summary to the Economic Co-ordination Committee (ECC) of the Cabinet in May 2009 regarding introduction of Ethanol-10, blended fuel in Pakistan.
One of the government's top officials told this scribe that the government should procure ethanol from local industry at international rates to minimise its export. However, the final decision, is likely to be taken by the ECC in its meeting next week. The incentives package, the sources said, were discussed at an inter-ministerial meeting on Friday, presided over by the Minister for Industries who offered to inaugurate the E-10 pilot project.
E-10 GASOLINE TO HELP REDUCE IMPORT BILL The launch of new fuel, E10 Gasoline being prepared by blending 10 percent ethanol with petrol is part of the government strategy to promote alternate energy resources, said Advisor to Prime Minister on Petroleum, Dr Asim Hussain while addressing the launching ceremony of the fuel.
"E10 will not only help the country in reducing its import bill in coming years but will also provide motorists with an economical fuel option," Dr Asim said. Asim said the petroleum prices were showing a downward trend in international market and hinted at lowering the POL prices in Pakistan by the end of this month if the global trend continues.
He said that 30 filling stations would be set up throughout the country for selling Ethanol-blended E10 fuel that would cost consumers Rs 2.40 less than common petrol.
It is learnt that Ethanol-mixed petrol would be sold Rs 2.40/litre less than the current petrol price. About 10 percent ethanol will be mixed in the petrol in preliminarily stage and the ratio will be increased with the passage of time. In first phase, the ethanol-mixed petrol will be provided from PSO petrol pumps in Islamabad/Rawalpindi and later on its sale will commence across the country.
(BRecorder)
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