Pakistan has taken a significant step towards commencing the construction of the $10 billion refinery in Balochistan by reaching an agreement with a Chinese company, granting it the construction rights for the project. The Pakistan State Oil (PSO) inked a Memorandum of Understanding (MoU) with the Chinese company to secure the engineering, procurement, and construction contract (EPC), a crucial requirement set by Saudi Arabia for its $3 billion equity investment in the refinery project. The investment in the new refinery project was linked to the requirement of raising equity by Pakistani companies and awarding the Engineering, Procurement, and Construction (EPC) contract. The collaboration involves four leading Pakistani state-owned entities: Oil and Gas Development Company Limited (OGDCL), Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL). Through a joint investment strategy, these companies will work together on the Greenfield Refinery Project, with significant foreign investment from world-class oil and gas giants through equity participation. The integrated refinery petrochemical complex is envisioned to have a crude oil processing capacity of at least 300,000 barrels per day (bpd) along with a petrochemical facility in Pakistan. The project will include various components such as marine infrastructure, a petrochemical complex, crude oil storages, refined utilities, and pipeline connectivity.

Domestic production of cooking oil, and vegetable ghee during the 11 months of the financial year that ended on June 30, 2023, increased by 12.57 per cent and 10.44 per cent respectively as compared to the output of the corresponding period of last year. During the period from July-May, 2022-23 about 513,206 metric tons of edible oil were produced locally in order to fulfil the domestic requirements as compared to the manufacturing of 455,884 metric tons of same period last year. Meanwhile, during the period under review, about 1.421 million tons of vegetable ghee were locally manufactured as against the production of 1.286 million tons in the same period last year, which was up by 10.44 per cent, according to the data of the Pakistan Bureau of Statistics.

Finance Minister Ishaq Dar has told the stakeholders to finalise formalities to outsource the operations of Islamabad International Airport (IIA) by August 12, the final day of the incumbent government’s term, according to sources. The minister chaired a meeting of the steering committee for assessing the progress of airport operations outsourcing on July 15. The committee has given explicit instructions to complete the necessary procedures for IIA outsourcing as a priority. An official announcement issued after the meeting said World Bank’s International Finance Corporation (IFC), the transaction adviser for the outsourcing, briefed the meeting on the progress. The meeting agreed to fast-track IIA’s outsourcing to improve service delivery in line with best industry practices. The IFC also gave a presentation to the committee which also took decisions on the future roadmap of outsourcing IIA operations. The government, faced with a dearth of forex reserves, has been pushing for outsourcing the operations of major airports. The finance minister has already convened multiple meetings of the committee formed to engage foreign operators for outsourcing.

The International Monetary Fund (IMF) has predicted that Pakistan’s growth is expected to gradually return to a potential five per cent in the medium term “assuming sustained policy and reform implementation and adequate financial support”. Last week, the global lender’s executive board had approved $3 billion nine-month standby arrangement (SBA) for Pakistan in order “to support the authorities’ economic stabilisation programme”. The board had approved the bailout package for the country for an amount of $2.25bn Special Drawing Rights (SDRs) — reserve funds that the institution credits to the accounts of its member nations — the IMF had said in a statement, adding that this amounted to about $3bn, or 111pc of Pakistan’s quota. The Fund said broad-based reforms would have to continue to improve the country’s fiscal framework such as strengthening revenue administration, enhancing public financial management, strengthening spending transparency and improving debt management.

Chinese Vice Premier, He Lifeng, has arrived in Pakistan for a three-day visit to commemorate the 10th anniversary of the China-Pakistan Economic Corridor (CPEC). Federal Minister for Planning Ahsan Iqbal, Interior Minister Rana Sanaullah and Advisor to the PM Tariq Fatimi received the honourable guest on his arrival at the airport. The Foreign Office (FO) announced that the Chinese vice premier would be in Pakistan from July 30 (today) to August 1 (Tuesday) to attend a ceremony celebrating 10 years of CPEC as the chief guest. He Lifeng will call on President Dr Arif Alvi and Prime Minister Shehbaz Sharif during his visit. Vice Premier He Lifeng has played a prominent role in China’s international economic relations and implementation of the Belt and Road Initiative, of which CPEC is a flagship project. As the Chairman of the National Development and Reform Commission (2017-23), he was instrumental in the planning and execution of multiple CPEC projects in Pakistan.

Pakistan gave initial approval for signing a framework agreement with the United Arab Emirates (UAE) to hand over two more Karachi port terminals, including the development of a new multipurpose cargo terminal. The new terminal will be managed for handling food cargo and other commodities, including fertiliser. The contract will also include the up-gradation of Pakistan International Container Terminal (PICT) facilities and the development of associated infrastructure. Earlier, Pakistan had handed over the operations of five berths (6-10) of the port on the East Wharf of Karachi port. Abu Dhabi Ports has shown fresh interest in the acquisition of 1,833 meters quay length out of the total quay length of 3,124 meters of East Wharf KPT, as shown in the official documents. Abu Dhabi Ports already acquired 800 quay meters last month under the Karachi Gateway Container Limited (KGCT), and after the new contract, it will control 85% of the quay length of East Wharf. The initial agreement will be signed for a period of five years, which may be extended for as many terms as both the UAE and Pakistan mutually agree. There was a proposal in the ECC to extend the Concession Agreement period to more than five years, said the officials. Pakistan and the UAE have already signed the Concession Agreement for berths 6 to 10 on June 22 at the Karachi Port.

Pakistan managed to achieve a current account surplus for the third consecutive month in May, which stood at $255 million, but it came at the cost of economic growth. The surplus mainly stemmed from the improvement in export earnings compared to the previous month. The central bank announced on its official Twitter handle on Monday that the “current account balance recorded a surplus of $255 million during May 2023 compared to $78 million in April 2023.” Overall, the current account deficit for the first 11 months (Jul-May) of the outgoing fiscal year contracted 80.5% to $2.94 billion compared to $15.16 billion in the same period of last year, according to the central bank data. The significant reduction in the deficit came after the government and the central bank curbed imports owing to the critically low foreign exchange reserves, which currently stand at around $4 billion, and the risk of debt default. A massive reduction in the import of raw material forced industries to shut down partially or completely. As a result, Pakistan’s economic growth dropped to just 0.3% in FY23 compared to 6.1% in the previous fiscal year. The country had posted a current account deficit of $1.50 billion in May 2022. The central bank data showed that the export of goods increased to $2.59 billion in May 2023 compared to $2.10 billion in April. The import of goods, however, remained stagnant at $3.78 billion in May compared to $3.67 billion in April. The inflow of workers’ remittances ticked down to $2.10 billion in the month under review compared to $2.19 billion in April. Financial experts projected that the current account would remain in surplus in June, the last month of FY23, considering the government would maintain its control over imports amid slim chances of revival of the International Monetary Fund’s (IMF) loan programme, which is ending on June 30, 2023.