Newsletter 153

Newsletter

Publication 153

15th Jun 2023

Karachi Port Trust (KPT)’s board of trustees has rationalised and revised the tariff schedule, it said on Monday, 12th June. According to KPT, the step was taken in wake of the incremental increase in the prices of fuel consequently causing corresponding increase in the cost of labour and port operations. It is estimated that the increase in tariff structure will help improve the financial position of Karachi port and it would find it comfortable to discharge the tasks assigned to it. The revised rates will become effective 30 days after the publication of the relevant SRO i.e., 3" May, 2023 except the port dues that would become effective after 60 days. KPT board has sanctioned rates under Section 43 read along with sub sections 43-A and 43-B of KPT Act 1886.

KPT revises tariff rates

Delayed Russian oil cargo reach Pakistan on June 11

The first-ever tranche of Russian oil ship carrying over 45,000 metric tons of crude has arrived at Karachi Port on 11th June. A Russian cargo vessel carrying 100,000 tonnes of crude oil was subjected to small parcels for transportation to Pakistan via smaller ships from the Omani port, which will take around two weeks to reach Pakistani Ports Karachi/Bin Qasim. The remaining of Russian crude will be transported to Port Qasim on June 20. The authorities have said that they will ensure the safe and smooth arrival of the Russian crude. The official said the delay in the arrival of Russian crude oil is due to logistical challenges. "The delay in the arrival of the cargo will not increase the transportation cost as it is already settled with the Russians," he said. "However, if the price of crude oil in the meanwhile goes down, then it will be detrimental to the country." Pakistan Refinery Limited (PRL) will refine the test cargo of Russian crude oil, blending it with crude imported from the United Arab Emirates and Saudi Aramco. PRL has been assigned to submit the test report to the government on the quality, yields, and commercial viability of the oil. The test cargo will also help the government to assess the transportation costs, refining costs, and margins for refineries. The move comes as Pakistan is looking to diversify its sources of oil imports amid rising global prices. Russia is a major producer of crude oil and has offered the country discounted prices on its oil. The payment for the Russian crude will be made in yuan through the Bank of China.

The Water and Power Development Authority (WAPDA) is on track to divert the Indus River for the construction of the Diamer-Bhasha Dam Project by November 2023, a statement said. The authority will construct a 1 km-long tunnel and 0.8 km-long canal for the diversion, the statement said. Terming it a major development in construction of the dam, a Wapda spokesperson said, after the diversion, Indus River would flow through the diversion system and rejoin its natural course downstream of the main dam site. River diversion is one of the key activities for implementation of the mega multi-purpose project. The construction work is progressing on 13 different sites. The upstream starter (coffer) dam to facilitate river diversion under stage-1 has been completed, while work on downstream starter (coffer) dam is going on and expected to be completed by November for stage-1 diversion, according to WAPDA statement. Diamer Basha Dam has a gross water storage capacity of 8.1 MAF to irrigate 1.23 million acres of additional land. Power generation capacity of the project stands at 4,500 megawatts, with annual energy of 18 billion units green and clean hydel electricity.

WAPDA on track to divert Indus River for Diamer-Bhasha Dam by November 2023

Govt fails to achieve key economic targets

Owing to the inability to revive the stalled International Monetary Fund (IMF) programme, restricted imports, severe floods and heightened political temperature in Pakistan, the government has missed all its macroeconomic targets set for the outgoing fiscal year 2022-23. The Economic Survey 2022-23 conceded that the government failed to achieve all macroeconomic targets, including GDP growth rate, inflation, per capita income, fiscal slippages, public debt, exports, investment and savings. The per capita income in dollar terms witnessed a downslide by 11.3 percent and stood at $1,568 in 2023 against $1,765 in FY2022. The size of Pakistan’s economy in dollar terms also shrank as it fell to $341 billion in the current fiscal year 2022-23 against $375 billion in the last financial year 2021-22. Addressing a news conference while launching the Economic Survey on 8th June, Federal Minister for Finance Ishaq Dar said that it would be unfair and undemocratic if the incumbent regime starts negotiating fresh deals with the IMF.

Average natural gas consumption reduced by 8.61 percent to 3,258 million cubic feet per day (mmcfd) year-on-year in July-March 2023 (9MFY23) period against 3,565 mmcfd use recorded in the corresponding period last year. Total consumption of indigenous gas and imported Regasified Liquefied Natural Gas (RLNG) stood at 2,627 mmcfd and 631 mmcfd, respectively, during Jul-Mar FY2023. System or indigenous gas supply during the period contracted by 75mmcfd or 2.85 percent to 2,627 mmcfd while availability of imported RLNG reduced by 232 mmcfd or 36.76 percent to 631 mmcfd.The share of power sector in natural gas consumption stood at 999 mmcfd or 30.66 percent of total gas use in 9MFY23 against 1115 mmcfd share of power sector or 31.28 percent of total gas use in corresponding period of last fiscal. The share of domestic sector in natural gas utilisation stood at 907 mmcfd or 27.84 percent of total gas use in 9MFY23 against 908 mmcfd share of power sector or 25.47 percent of total gas use in corresponding period of last fiscal.

Gas consumption deflates 8.61 percent in 9MFY23

TAPI gas pipeline implementation plan signed

In a major development, Turkmenistan and Pakistan here signed a Joint Implementation Plan (JIP) to accelerate work on the TAPI Gas Pipeline project in Islamabad. Pakistan has suggested to Turkmenistan to lay down some portion of the gas line up to Herat in Afghanistan to ensure the ownership from Taliban, which will also help move the project. According to a press release issued here by the Petroleum Division, the JIP was signed by Minister of State for Petroleum Dr Musadik Malik from the Pakistani side and from the Turkmen side by State Minister and Head of TurkmenGaz, Maksat Babayev. The ceremony was witnessed by Prime Minister Shehbaz Sharif, senior cabinet functionaries, representatives from the Petroleum Division and Inter State Gas Systems Pvt. Ltd. The proposed route supply source is with a pipeline length of 1,849 kms. It will transport up to 33 billion cubic meters (bcm) (average 3.2 BCFD) of natural gas per year over a 30-year period where Pakistan’s off-take will be 1.35 BCFD. The JIP seeks the constitution of a Senior Coordination Committee (SCC) to expedite and oversee the project activities.

Pakistan’s central bank is making strides in the world of digital banking and aims to introduce a digital currency similar to cryptocurrencies such as Bitcoin in the near future. Additional Director of the Digital Financial Services Group at the State Bank of Pakistan (SBP), Shoukat Bizinjo revealed that numerous central banks worldwide, including Pakistan’s, are exploring the concept of CBBCs (callable bull/bear contracts) as a potential avenue for launching digital currencies. “Pakistan’s central bank is currently reviewing and consulting with other central banks regarding CBBCs and digital currency,” Bizinjo stated during the 16th International Conference on Mobile Commerce 2023. Bizinjo further revealed that the SBP is in discussions with local industrial players to introduce digital currency within Pakistan as well. Additionally, he highlighted the progress made by Electronic Money Institutions (EMIs) in the field of e-banking. EMIs have successfully launched e-money wallets for consumers and merchants, along with other digital payment instruments such as prepaid cards and contactless payment options. Currently, Pakistan has four live commercial EMIs, including NayaPak, Finja, CMPECC, and Sada Tech Pakistan. He explained that EMIs have an impressive e-money balance of Rs2 billion, managing 1.6 million e-money wallets and 2.4 million payment cards as of March 31, 2023. There are approximately 12 EMIs in various stages of acquiring licenses from the central bank, with numerous other companies in constant communication with the SBP to become EMIs, he said.

SBP paves the way for digital currency

IMC team meets PM to showcase first locally-made Toyota Corolla Cross HEV

A delegation from Indus Motor Company, led by Vice Chairman Shinji Yanagi, met with Prime Minister Shehbaz Sharif on 1st June, at the PM’s Office to showcase the first locally-manufactured Toyota Corolla Cross Hybrid Electric Vehicle (HEV). Also participating in the meeting was Yoshiki Konishi, President, Toyota Asia, Mitsuhiro Wada, Ambassador of Japan to Pakistan, also graced the occasion alongwith Members of the Cabinet, including Federal Minister of Finance and Federal Minister of Industries & Production. The PM commended Toyota’s initiative in bringing the first locally-manufactured Hybrid SUV to Pakistan and emphasised the need to further localisation efforts in the country as well as focus on exports. He further assured to uphold the incentives for HEVs as outlined in the AIDEP 2021-26 Policy. Federal Minister of Finance also appreciated the Corolla Cross Hybrid and the benefits the country would derive from the new technology both economically and environmentally.