Pakistan is planning to implement carbon pricing mechanism –a policy tool to lower greenhouse gas emissions. This has been stated in a report of the Asian Development Bank (ADB) titled, “Asian Economic Integration Report 2024, Decarbonizing Global Value Chains”. The report noted that establishing a carbon pricing mechanism is one of many important policy tools to lower greenhouse gas emissions. In Asia, economies have started instituting their carbon pricing mechanisms, though much work is still to be done. As of April 2023, two carbon taxes (Japan and Singapore) and five economy-level emissions trading system (Indonesia, Kazakhstan, New Zealand, the PRC, and the Republic of Korea) are in operation, and several economies (Brunei Darussalam, India, Pakistan, the Philippines, Thailand, and Viet Nam) are planning to implement them. Some Asian economies (such as Bangladesh, Nepal, Pakistan, the Philippines, and Thailand) are among the top 10 economies exposed to long-term climate risk, while Asia accounted for more than half of all multi-hazard global average annual losses for 2000– 2022. The report noted that Pakistan’s Logistics and Freight Policy—aims to enhance the domestic and international supply chains through seamless integration of logistics through road, rail, marine, inland waterways, and aviation.
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Pakistan Planning to Implement Carbon Pricing Mechanism to Lower Greenhouse Gas Emissions
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Increase in stevedoring charges worries importers, exporters
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In an already tough business environment, exporters and importers are facing another challenge due to increase in stevedoring and cargo handling charges at Karachi Gateway Terminal Limited (KGTL). In some cases the charges are nearly twice the old rates. They believe that charges have been raised without making any investment at the terminal. As a result, exports will become uncompetitive while costly imports will fuel food inflation. A cement maker said many exporters based in the country’s south have suspended their March plans for clinker till the matter is resolved. The Lahore Chamber of Commerce and Industry (LCCI) has informed the ministry concerned that importers of steel coils, wire rods, round bars and other bulk commodities are angry over the rise in charges. By taking over operations at KPT, the KGTL has raised the tariff for general cargo delivery on steel-related items from Rs50 per tonne to Rs480 per tonne. Financial strain Karim Aziz Malik, Chairman of Capital Office Islamabad, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), informed the Maritime Affairs Ministry that a recent joint venture between AD Ports and Keamari Terminal had led to unseen challenges for importers and exporters. Charges of Rs480 per tonne on import of various products combined with KPT’s wharfage are creating a financial strain on businesses. “The motive behind the government’s move to award our berths to KGTL is to provide state of the art equipment and facilities, with high value additions, to ensure that the business community makes substantial savings. “Until facilities are provided to the business community, no extra charges should be levied,” Karim Aziz Malik said.
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In a fresh push towards completion of a multibillion-dollar gas supply project, the government decided to start building an 80-kilometre segment of the Iran-Pakistan gas pipeline, extending from the Iranian border to Gwadar, at an estimated cost of $158 million (Rs44.2 billion), to ward off $18bn potential penalties from Tehran. The decision was taken at a meeting of the Cabinet Committee on Energy (CCoE) presided over by caretaker Finance Minister Dr Shamshad Akhtar. “The CCoE approved the recommendations of the Ministerial Oversight Committee for the IP Project (Iran-Pakistan gas pipeline project) constituted by the prime minister in September 2023 whereby the committee recommended to start work on the 80km segment of the pipeline inside Pakistan, i.e. from Pakistan border up till Gwadar in the first phase,” said an official statement issued by the Ministry of Energy, rather than the Ministry of Finance. The project will be executed by Inter-State Gas Systems (Pvt) Ltd (ISGC), an entity of the petroleum division, and will be funded through the Gas Infrastructure Development Cess (GIDC). The move followed opinion from independent consultants that Pakistan could be exposed to penalties should Iran press ahead with its arbitration bid. Cabinet Committee on Energy approves construction; work to be funded through GIDC
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CCoE approves initial phase of Iran-Pakistan Gas Pipeline project
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Jul-Jan period Petroleum group imports drop 12.06pc to $9.332bn
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Petroleum group imports witnessed a negative growth of 12.06 percent during the first seven months (July-January) of the current fiscal year and stood at $9.332 billion when compared to $10.611 billion during the same period of last fiscal year, Pakistan Bureau of Statistics (PBS) said. The data of exports and imports released by PBS revealed that petroleum group imports increased by 0.03 per cent on a year-on-year (YoY) basis and stood at $1.327 billion in January 2024 when compared to $1.326 billion during January 2023. On a month-on-month basis, it registered 14.52 per cent negative growth when compared to $1.551 billion in December 2023. Petroleum products imports witnessed 25.94 per cent negative growth during July-January 2023-24 and remained at $3.621 billion compared to $4.889 billion during the same period of last fiscal year. On a MoM basis, it registered 19.72 per cent negative growth and stood at $427.573 million in January 2024 when compared to $532.615 million in December 2023. On a YoY basis, petroleum products registered 37.82 per cent negative growth when compared to $687.613 million in January 2023.
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A global maritime insurance body has asked Pakistan National Shipping Corporation (PNSC) to submit a report on how it complies with the price cap scheme imposed by the European Union (EU) and G7 on Russian oil. The Protection & Indemnity (P&I) Club, which provides cover for open-ended risks such as cargo damage, war risk and environmental damage, said in a letter to Lahore Shipping (Pvt) Limited, a subsidiary of Pakistan National Shipping Corporation, that it needed to see its internal procedures and compliance manual on the scheme. The letter said that the "assured is required to provide it copy of its internal procedures on compliance with the restrictions and requirements adopted by EU/G7 and other nations that may from time to time adopt EU/G7 Price Cap Scheme". Global body has sought the names, titles and business units of the persons responsible for the implementation of its compliance programme and copy of its compliance manual and any trading material. The scheme, adopted by the EU and G7 in response to the Russian-Ukrainian conflict, limits the price that shippers and tanker charterers can pay for Russian crude and oil products.
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P&I Club probes PNSC’s compliance with Russian oil price cap scheme
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Mari discovers gas in ‘troubled’ Kohlu Block
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Mari Petroleum Company Ltd (MPCL) on Friday announced a gas discovery in a very prospective unexplored region of Kohlu District in Balochistan. “The discovery is of significant importance for future exploration as it has revealed valuable information about the existing petroleum system of the area,” said MPCL, the operator of the block with 95pc interest and the remaining 5pc with Oil and Gas Development Company Ltd (OGDCL). Mari Petroleum, a commercial arm of the Fauji Foundation with shareholding from the federal government, said it further planned to expedite exploration activities in the area to mature other prospects for drilling. Believed to be a highly promising hydrocarbon area among the exploration and development community, Kohlu Block-28 remained a virtually no-go area for local and international companies for about 33 years because of security concerns. Successive petroleum concession holders repeatedly announced force majeure over the block. Its exploration licence was first given to a British major in 1991 with shareholding from state-run OGDCL and since then has changed hands in the absence of a security cover. The MPCL said the gas discovery emerged from its exploratory efforts at Maiwand X-1 St-1 exploration well, drilled in Block 28. It is in close vicinity of the Sui gas field that fuelled the country for almost six decades and also near Zin Block where major deposits have been identified albeit with a low heating value that could not be flowed through pipelines but could be utilised on-site for fertiliser and power production like Uch gas field, generating over 900MW of cheap electricity. A special security force was created for the area a couple of years back to facilitate the company to enter the exploration block spread over 6,200 sq km.
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Under pressure to meet the Feb 15 deadline of the International Monetary Fund (IMF), the caretaker government allowed another up to 45 per cent increase in the natural gas tariff with effect from Feb 1 to meet revenue requirement of the gas utilities targeted for the current year. The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by Caretaker Finance Minister. The meeting made certain adjustments in rates of increase proposed by the Petroleum Division that would be incorporated in the revised summary and taken to the federal cabinet for formal approval and notification. “After discussion, the ECC decided that revision of sale price/tariff should be consistent with revenue requirements of the Sui companies,” said an official statement issued by the Ministry of Finance after the ECC meeting.
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Caretakers ‘oblige’ IMF with 45pc gas price hike
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Industrialists slam ‘adverse’ govt policies
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Prominent figures from the industrial sector have raised concerns over the economic challenges brought forth by the caretaker government’s policies. In a press statement issued, these industry leaders said the policies of the caretaker government, whose main responsibility was to organise elections, had brought in severe economic crises, the slowdown in industrial production and an alarming declining trend in exports. Exorbitant increases in gas and power tariffs under IMF conditions and other costly industrial inputs owing to mammoth rupee-dollar parity and failure to provide a level playing field to compete globally had pushed the industries on the verge of closure, they said. Aptma warns of closure Meanwhile, the All Pakistan Textile Mills Association (Aptma) has warned that over 50 per cent of firms in the textile and apparel sectors are at high risk of shutting down over the coming weeks, causing widespread unemployment and social unrest if corrective action is not urgently taken. The textile body asked caretaker Energy Minister Muhammad Ali to hold an urgent meeting with the textile stakeholders in view of the precarious situation of the industry in the coming months in the wake of unbearable high power and gas tariffs, maintaining the competitiveness of textile exports and averting the declining trend in the textile exports. Aptma said the international competitiveness of textile and apparel exports was continuously being eroded by ever-increasing energy prices, which on average, were over twice that of regional competing countries.
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A leading local car manufacturers, has partnered with Chinese car manufacturer Great Wall Motors (GWM) to introduce their latest innovation in the automotive industry, the electric vehicle ORA 3. This collaboration aims to revolutionise the Pakistani market by offering sustainable and eco-friendly transportation solutions. The company has announced that bookings for this vehicle will open in the coming days, with an initial booking price of Rs5 million. Pakistan is catching a ride on the global NEVs boom. Last year, global sales of NEVs reached approximately 14.61 million units, representing a 38% year-on-year growth. Among them, China accounted for 9.495 million units of NEV sales, capturing a 65% market share in the global market. A number of Chinese companies such as BAIC, Changan, JAC Motors, Great Wall Motors, MG, FAW, and Chery Automobile have established their presence and even formed joint ventures in Pakistan, driving the new energy vehicles industry in the country towards intelligence and electrification. This partnership opens doors for technological advancements and knowledge sharing, enabling the local auto industry to embrace sustainability and cater to the growing demand for eco-friendly transportation.
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GWM launch ORA 3 EV in Pakistan
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Govt hints at lifting trade with Saudi Arabia up to $20bn
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Observing that the current trade volume falls short of expectations, Caretaker Federal Minister for Commerce and Industry, Gohar Ejaz said in Riyadh that Pakistan wanted to lift bilateral trade with Saudi Arabia upto $20 billion. Addressing the Pakistan-Saudi Business Forum, the minister said that legislation would be enacted to promote bilateral investment between the two brotherly countries, according to press statement issued by Commerce Ministry. Dr. Gohar Ijaz, who is heading a delegation of Pakistani industrialists, also met with the Saudi Minister of Commerce, Dr. Majid bin Abdullah Al-Kassabi. The meeting focused on enhancing investment in sectors such as construction, digital economy, and infrastructure between Pakistan and Saudi Arabia. Speaking at the forum, Chairman of the Saudi Business Forum Hassan Al Hazawi stated that bilateral trade between the two countries has increased by 35 percent. The Saudi Minister of Commerce commended efforts to strengthen bilateral trade relations and praised Gohar Ijaz for his personal interest in enhancing trade relations. He emphasized that Pakistanis were our brothers, and Saudi Arabia offered extensive employment opportunities for Pakistanis.
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