Pakistan Economy - News & Updates - Archive

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Three oil, gas exploration firms to launch work in Balochistan​

Thursday, February 12, 2009

QUETTA: Chairman Senate Committee on Petroleum and Natural Resources Syed Dilawar Abbas on Wednesday announced that exploration of oil and gas would soon be launched at three sites in Balochistan as the provincial government had given security clearance in this regard.

Addressing a press conference flanked by the committee members Senators Mir Mohabbat Marri, Pari Gul Agha, Nasir Mengal and others here, he said three out of five firms who had been granted oil and gas exploration licenses would soon start work in Shan, Shahan and Jhal Magsi as the provincial government has assured complete security to these firms.

A total of 28 oil and gas wells would be excavated within a period of three months and each well would cost USD 17 million to these firms. Besides, sufficient amount would also be spent on the welfare of the people living along these sites, he said.

Explaining the status of his committee, he said the body is not part of the government at all. Rather, it is formed to monitor government performance and has upheld Balochistan’s interests during its meeting.

Urging the population of the areas where oil and gas exploration operation would take place for extending cooperation to these firms, he said it would not only create innumerable job opportunities for local population but also help improve civic infrastructure in these areas.

To a question, he said the committee had recommenced that five per cent revenue of the project should be directly spent on the development of local social infrastructure.

The government, agreeing with the recommendation, made it a part of its petroleum policy, he said, adding that revenue under gas royalty would also be increased under the new formula by the federal government in this regard.

Referring to the disparity between the supply and demand of natural gas in the country, he said the country needs about 3500 million cubic feet gas while the available gas supply is a mere 900 million cubic feet. He said that gas reserves in Balochistan are rapidly depleting and the government would have to draw a plan on war footings to cope with the situation.

Managing Director Pakistan Petroleum Limited Khalid Rehman, and Managing Director Oil and Gas Development Limited Syed Tahir Hussain, were also present at the occasion.

 

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WB may restore IBRD loans for Pakistan after performance review​

ISLAMABAD: World Bank has informed the government of Pakistan that it would consider restoration of IBRD loans (Programme Loans) facility after the forthcoming first review of $7.6 billion International Monetary Fund (IMF) Stand By Arrangement (SBA), a senior official at Ministry of Finance informed Daily Times on Wednesday.

Restoration of IBRD loan facility would not only help government carryout reforms but also help restore the confidence of investors in Pakistan’s economy, as this restoration would mean that Pakistan’s economic indicators have improved and economy is out turmoil.

First review of the $7.6 billion SBA is scheduled at Dubai during February 14-24, where senior officials from economic ministries and IMF authorities would review Pakistan’s performance.

Due to high ranking in vulnerability index of IMF, World Bank had changed its lending arrangements with Pakistan from programme loans to just project loans last year resulting in releases of funds in periodical installments instead of release of full funding of the programme. Prime Minister, Yousuf Raza Gilani during a meeting with Ms Ngozi Okonjo-Iweala, Managing Director of the World Bank Group has urged the Bank to resume the IBRD lending for Pakistan.

Pakistan is expected to get $750 million by the end of March, after its successful completion of first review of stand by arrangement agreed with the IMF.

The official further informed that the key performance benchmark was to keep the budget deficit at 4.2 percent of the Gross Domestic Product (GDP) during the current fiscal year and budget deficit has been estimated at 2 percent of the GDP in first half Jul-Dec period of this fiscal year 2008-09.

The other important performance benchmark was to keep the State Bank borrowing at Rs 258 billion at the end of each quarter and the government is strictly keeping its SBP borrowing at the agreed target.

The official said that the review of Pakistan’s economy would be covering economic performance and economic data relating to second quarter (October-December) 2008. After the completion of first review, the IMF authorities would place their findings before their executive board that will formally approve the second installment for Pakistan worth $750 million by the end of March.

Vulnerability index comprises of many factors like different economic indicators i.e. fiscal situation, economic growth, current account deficit and inflation. The countries having their important economic indicators in negative zone face difficulties in getting new programme loans.

Although the present government has taken bold decisions and initiatives, but it has failed to please the high ups in the IFIs. PPP led coalition government has taken unpopular decisions like increase in gas tariff, increase in POL product price, and increase in electricity prices.

 

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IFC provides $121m trade support ​

Friday, February 13, 2009

ISLAMABAD: The IFC, rthe private sector wing of the World Bank Group, announced on Thursday that it provided Pakistani banks with $ 121 million (Rs.9.5 billion), in trade finance guarantees, over the past seven months.

The finance guarantees helped Pakistan increase cross-border trade during the recent economic downturn, besides benefiting many of its important business sectors.

Due to support from the IFC’s Global Trade Finance Programme, Pakistani banks executed trade transactions worth roughly $ 121 million between July, 2008 and January, 2009.

Sectors and products that benefited from this support include, agricultural products and machinery equipment while the IFC supported trade volume of iron and steel increased by $ 20 million compared with last year and Pakistani hospitals imported about $ 6 million of medical equipment this year with the IFC’s` support.

“We are pleased to be part of this programme. This initiative is especially vital in times of international financial crisis and it is enabling us to provide greater services to our clients and expand Pakistan’s trade activities” Zakir Mahmood, CEO of Habib Bank, said.

Irfan Siddiqui, CEO of Meezan Bank, said, “The IFC has helped us increase our reach and coverage of confirming banks.

IFC came at a time when the global financial crisis was knocking on the doors of emerging markets.”

 

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Pakistan Energy Yearbook FY08: Dependence on imported energy products increasing​

KARACHI: The country’s dependence on imported energy products has risen by five percent in the last four fiscal years on its growing demand by power plants and transport sector.

The Pakistan Energy Year Book FY08, released by Hydro Carbon Development Institute, showed that the share of imported energy has risen to 35 percent in FY08 against 30 percent in FY04. This is mainly due to higher import of refined petroleum products, crude oil and Liquefied Petroleum Gas (LPG) for meeting the local demands of various sectors. During last four fiscal years (FY04-08), the energy consumption grew by 8 percent according to Compound Annual Growth Rate (CAGR), whereas energy supplies have risen by 5 percent with significant shift in energy supply mix from gas to oil.

According to the report, the energy consumption of the country stood at 39.4 million tonnes with gas and oil’s share in energy consumption at 40.3 percent and 29.3 percent, while that of, electricity, coal and LPG at 15.2 percent, 13.7 percent and 1.5 percent respectively.

The oil contribution doubled during the last 4 years with consumption reaching 44.7 percent. In FY04, gas share in thermal power generation was 77.5 percent , whereas oil had a share of 21.9 percent. Owing to rising gas shortage and availability of alternative fuel like furnace oil (FO), gas supply to power plants declined annually by 3 percent during the said period. Besides these factors, phenomenal increase in CNG consumption (43 percent CAGR) during this period also confined gas supplies to power sector. In terms of fuel mix, gas remains the primary contributor to thermal power generation with consumption of 8.5 million tonnes (54.9 percent share).

The report said the country’s primary energy supplies posted 23.8 percent growth in FY08 and stood at 62.9 millon tonnes (tons of oil equivalents) versus 50.8 million tonnes in FY04. In FY04-FY08, the average growth of supplies stood at 5 percent with 3.8 percent growth posted in FY07, 9.31 percent growth in FY05 and 8.06 percent in FY04.

The indigenous gas remains the major contributor of the energy supplies in this period. However, its share in overall supplies has declined to 47.5 percent from 48.4 percent last year and stood at 29.9 million tonnes. Whereas, oil supply during the period surged by 5.6 percent to 19.2 million tonnes thus increasing oil’s share to 30.5 percent against 30 percent in FY04. Out of total supplies which include gas, oil, LPG, coal, hydro-and nuclear electricity, indigenous production contributed 68.5 percent in FY08 as compared to 70.6 percent share in FY07 and 72.3 percent in FY04. Therefore imports of petroleum products grew by a CAGR of 14 percent during last 4 years on the rising local demand.

Energy experts told the country’s reliance of imported energy will increase with the same pace on the constant surging demand of natural gas and furnace oil particularly for electricity generation. Also, the reliance of transport is shifting back to petrol and diesel on the shortage of natural gas in north part of the country during winter. The cash-starved refineries are operating under capacity, so the country has to be dependent on imported petroleum products in the future, they added.

The total refinery output fell by 6.1 percent in year-on-year terms during July-January as their production capacity shrank significantly with low stocks of crude oil due to piling up of circular debt. The sales of Furnace Oil and High Speed Diesel decreased by 9.5 percent and 4.8 percent YoY in 7MFY09. The Motor Spirit off take has improved by 4.4 percent YoY. On the other hand, the local production of energy products is growing with a stable rate, keeping its share constant at 18 percent in the local consumption. Oil and LPG production of the country fell by 5.9 percent and 9.3 percent YoY respectively to 68,184 bpd and 1,403 tpd, respectively. Gas production, on the other hand, increased by 1.2 percent YoY to 4,023mmcfd.

 

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Personal loan, credit card limit fixed at Rs one million​

KARACHI (February 12 2009): The increasing number of default cases in consumer financing and credit cards have compelled the State Bank to take some preventive steps. Therefore, the State Bank of Pakistan on Wednesday amended the regulations and fixed the personal loan and credit card limit at Rs 1,000,000 for a single person and asked the banks to obtain consumer credit report from CIB before allowing any consumer facility.

The SBP said that based on the review of prudential regulations and feedback from banks and DFIs, following amendments in the regulations for consumer financing have been made with immediate effect. As per amendment at the time of granting facility under various modes of consumer financing, banks/DFIs shall obtain a written declaration on the prescribed format (Annexure-CF 1) from the borrower divulging details of various facilities already obtained from other banks/financial institutions.

Before allowing any facility, the banks/DFIs shall obtain a consumer credit report from the Credit Information Bureau of State Bank of Pakistan, or from any consumer Credit Information Bureau of which they are member.

Under regulation R-3, while determining the credit worthiness and repayment capacity of the prospective borrower, the banks/DFIs shall ensure that total monthly amortisation payments of consumer loans should not exceed 50 percent of the net disposable income of the prospective borrower. Bank/*** may issue credit card to one person with a maximum unsecured limit not exceeding Rs 1,000,000 subject to mandatory credit check and prescribed debt burden and condition that total unsecured credit card limits availed by that person from all banks/DFIs does not exceed Rs 1,000,000, the SBP circular said.

It said that as a result of above upward revision in clean limit for credit card, regulation concerning prime customers mentioned in R-7 stands withdrawn.

Under house financing regulation (R-17), banks/DFIs may extend mortgage loans for housing up to any tenure defined in the bank's/***'s duly approved credit policy and keeping in view the maturities' profile of their assets and liabilities.

SBP, amending regulation for personal loan including loans for the purchase of consumer durables, said that banks/DFIs may assign personal loan limits to one person with a maximum unsecured limit not exceeding Rs 1,000,000, subject to mandatory credit check and prescribed debt burden and condition that total unsecured personal loans limits availed by that person from all banks/DFIs does not exceed Rs 1,000,000.

As a result of above upward revision in clean limit for personal loans, regulation concerning prime customers mentioned in R-23 stands withdrawn, SBP said. Other instructions on the subject will remain the same.

 

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Pakistan wants more from US​

* WP report says Gilani emphasised the need to ‘expedite’ new US aid package after meeting with Holbrooke
* Kayani likely to press requests for increased military aid​

LAHORE: Pakistan warned US special envoy Richard Holbrooke on Tuesday it expected more from the United States in return for its cooperation against Al Qaeda and the Taliban, a Washington Post report says.

Statements issued by President Asif Zardari and Prime Minister Yousuf Raza Gilani, after meeting with the envoy, emphasised the need to ‘expedite’ a new US aid package, and “the importance of enhanced cooperation in defence and intelligence sharing”. Holbrooke only said that he was there “to listen and learn the ground realities”.

In Washington, US officials said that while a revised strategy would acknowledge Pakistan’s crucial role, developing a new relationship was likely to be a long process. “Not having patience makes all the sense in the world in terms of the Afghanistan threat,” Joint Chiefs of Staff Chairman Admiral Michael Mullen said in a recent interview. But in Pakistan, he said “there is not a quick answer”, and any new US strategy would have to “recognise the tension” between the short- and long-term objectives.

The next step, the officials said, would be a visit to the US later this month by Chief of Army Staff General Ashfaq Kayani, whom Mullen credited with a number of positive steps including: replacing the former head of Pakistan’s intelligence service, who was widely mistrusted by the CIA; appointing a new chief for the Frontier Corps; and doubling Frontier Corps salaries.

Increased aid: Gen Kayani is likely to press requests for increased military aid in several categories, including Cobra attack helicopters, night-vision equipment, and equipment to jam extremist radio transmissions, intercept satellite telephone communications, and improve communication among Pakistani military units in the Federally Administered Tribal Areas (FATA).

Pakistan would also like at least to “be in the room” when targeting decisions for CIA aerial drone attacks in the FATA are made, a senior Pakistani official said. Pakistan also wanted more funding stability, he added. In the news conference following a meeting with Holbrooke, Foreign Minister Shah Mehmood Qureshi said Pakistan and the US would have “to sit together to understand the implications” of a planned doubling of US troops in Afghanistan this year, and there would have to be an accompanying ‘civilian surge’ in Pakistan. “By civilian surge,” he said, “I mean greater focus on socio-economic development and greater political engagement with the reconcilable elements” among extremists.

The Senate Foreign Relations Committee is reformulating a massive US development assistance programme for Pakistan, including at least $1.5 billion annually for the next five years. Committee chairman Sen John F Kerry said the amount of aid might be increased in legislation that he said was likely to be completed “in a matter of days”. The legislation will include benchmarks allowing Congress to judge Pakistan’s performance. “We have no problems with greater transparency and accountability,” a Pakistani official told the Washington Post. “But the funding cannot stop.”

 

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Pakistan to pay $516 million against Eurobond maturity on February 19​

ISLAMABAD (February 12 2009): Pakistan would pay 516 million dollars against 500 million dollars Eurobond on February 19 after its maturity, which was issued in 2004. "Pakistan resumed getting finances from international financial market and issued a Eurobond, which is maturing now in February," says a Finance Ministry officials requesting not to be named.

The payment of 16 dollars is of interest and other expenditures associated with the bond, says the official. The Finance Ministry has completed its arrangements to make the payment on maturity of the bond, says the official. The government is not focusing on issuing any bond now, rather it is waiting international market to rebound so that it can have space for junk bonds.

As market can have funds for such bonds, Pakistan would start looking at those markets. On February 12, 2004, Pakistan successfully issued 500 million dollars after a hiatus of over five years. It was Regulation-S Euro Bond lead managed by J P Morgan, Deutsche Bank and ABN Amro Bank.

 

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Defaults touch Rs 320 billion mark: textile industry may bring banking sector down​

LAHORE (February 12 2009): Textile industry may bring the banking sector down with a string of defaults, occurring all around the sector. Sources in textile sector confided to the Business Recorder on Wednesday that a leading textile group had recently defaulted Rs 5.6 billion of a bank, whose paid-up capital is rupees six billion.

Sources added that the concerned bank had extended a moratorium of three years, besides arranging a Rs 2.5 billion credit line for the group. Similarly, said the sources, the default of a bank in Punjab had touched Rs 50 billion mark. The textile industry owns about 22 percent loan portfolio of the banking sector and its default has reached Rs 320 billion at present.

It is also observed that many single spinning units have closed their operations since the last few months due to heavy operational losses, particularly because of the worst electricity and gas shortage in the country. The management of all leading banks is sending reminders to the sector but all in vein, as the defaulters are not bothering even to throw them to the dustbin.

Interestingly, everyone is disclosing secretly about the closure of his neighbour unit while waiting for a relief package from the government. "The industry would lose ground soon in case the government failed to respond to its call to survive," said one former office-bearer of All Pakistan Textile Mills Association (APTMA).

The spinning sector started feeling the pinch back in 2006-07 when double digit mark up rate played havoc with their viability. However, majority of the sufferers was those who owned single units, as the groups were able to survive the mark up increase. However, once the power crisis jumbled up the cost of production, the big groups also started feeling the heat.

"Majority of the big houses are surviving by arranging alternate defaults and they pay the bank instalment for one unit while defaulting for other and so on," said one senior spinner, who is not operating his unit over the last eight months.

It may be noted that the Advisor to the Prime Minister on Finance Shaukat Tarin had assured the textile industry to ensure a relief package for textile sector "within days and not weeks" in his January 16 meeting with the APTMA leadership.

Two consecutive meetings of Pakistan Banks Association (PBA) with a stress followed it from the chair for early relief to the industry. However, sources privy to the meetings, suggested that the banks were not serious over extension of a helping hand to the industry.

According to the sources, the textile industry believed that the banking sector would be facing a crisis like situation in three months ahead in case no early review of loans to the industry took place. These opined that the textile industry's working was calculated on the basis of 365 days operations, but heavy power and gas shortages had put the operation plans upside down.

It may be noted that Tarin has also hinted at termination of six percent research and development (R&D) fund to apparel sector, which was heavily pampered by the Musharraf regime. The industry circles are of the view that situation might even take a worst turn in case the investments in apparel sector also reversed the feasibility plans.

 

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Forex reserves rise to $10.29bn ​

KARACHI (February 12, 2009): Pakistan's foreign exchange reserves rose by $130 million to $10.29 billion in the week that ended on Feb. 7, the State Bank of Pakistan said on Thursday.

The State Bank of Pakistan's reserves rose to $6.92 billion from $6.79 billion a week earlier, while reserves held by commercial banks were flat at $3.37 billion, the bank said.

Pakistan's foreign reserves hit a record high of $16.5 billion in October 2007 but fell to $6.6 billion in November, largely because of a soaring import bill.

 

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PEW stresses need for plan to control inflation ​

ISLAMABAD (February 12 2009): The Pakistan Economy Watch (PEW) has stressed the need of a systematic plan of action to bring inflation under control as it is threatening some most critical sectors of the economy, said Dr Murtaza Mughal, President of PEW, here on Wednesday.

Talking to a delegation of industrialists, he said that the State Bank of Pakistan seems very concerned about inflation, as everything has become more "valuable", except rupee, and it seems that efforts to bring down inflation are increasing unemployment as industrial, manufacturing, exports and other sectors are making downsizing.

"The survival of manufacturers, exporters and millions of employees is at stake due to cost of credit," he said, adding that industrial units are closing down in large numbers, which is sending wrong signals.

He said that many industrial units are not viable anymore, but the owners are running them to remain in business, keep presence in international market or preserve family honour. "There must be some missing links in the monetary policy; everything cannot be compromised just because some policymakers feel strongly about progressive price increase", he added.

"Suppressing inflation is not the only obligation of the regulators", he said. "Who will frame policies to boost or at least maintain domestic production which is sliding at a fast pace threatening whole system?" Dr Mughal asked. He said: "We have developed the habit of obeying every demand of the international lenders, except for taxing the sacred cows," he said, adding that the tendency was an obstacle in achieving the tax-to-GDP ratio.

He stressed the need for concrete plans to revive the ailing economy, saying that one of the highest interest rates, widening trust deficit and uncertainty touching skies, "we should have a strategy to bail out the country". Inflation, he said, "is not the only threat to economy; we should also take sliding savings and revenue collections into account. Consumer finance conditions or banks needs to be made stringent to block unplanned expansion and avoid any crisis".

 

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Economy suffers over $35 billion loss due to Afghan turmoil ​

LAHORE (February 12 2009): Business community on Wednesday urged Obama's special representative, Richard Holbrooke who is currently visiting Pakistan, to help provide direct access to Pak products in US markets as Pak economy has so far suffered irreparable huge loss of $35 billion direct and indirect due to turmoil in Afghanistan.

Founder chairman Pak-US Business Council and VP Saarc Chamber of Commerce and Industry, Iftikhar Ali Malik while talking to APP here, said that "we entire business community welcome Richard on exploratory visit to Pakistan". He said it is on record that Pakistan is the only country in the world which has not only suffered tremendous economic loss but also huge human loss in war against terror.

Iftikhar said that more than three million Afghan refugees in Pakistan were also posing security risk. He said that entire Pakistani nation including business community, all political parties under the dynamic leadership of President Asif Ali Zardari and guidance of Prime Minister Syed Yousuf Raza Gilani, people from all strata of the society stand united against the menace of terror and fully committed to defeat it as Pakistan has always been an active US associate against the menace of terror.

He said due to war on terror, Pakistan's national economy is exclusively suffering a net loss of $6 billion annually as a fallout of the war against terror, which has displaced thousands of people and endangered security in the country.

In the prevailing scenario, United States must provide direct market access to Pak products on zero rate duty to help stabilise the country's bleak economy in the wake of the war against terror.

Iftikhar who is also co-chairman businessman panel, the largest alliance of chambers in the country and ruling group in FPCCI on behalf of entire business community again urged for US assistance to Pakistan to help overcome the economic crisis, by restoring the quota for Pakistan at par with all other under developed countries.

"The US should buy back products from industrial zones in Pakistan and help strengthen the existing industrial zones with the provision of modern infrastructure", he said, adding that proper and timely American assistance will help ensure durable peace and stamp out terrorism, besides strengthening the democratic government in Pakistan.

Observing that due to the unrest and turmoil in a neighbouring country, he said a major chunk of Pak food stock is smuggled to Afghanistan, which ultimately leads to acute foodgrain scarcity within Pakistan. The current economic crisis looming world-wide has especially impacted the poor countries, he added.

He said there is vast scope for US private sector investors in every sphere of life, particularly in the agro power and IT sectors, adding that the US Chamber of Commerce (USCC) can play a pivotal role in promoting bilateral trade relations.

"Pakistan is an emerging market rich in opportunities for American investment, while the US is already an important trading partner" he said. Malik urged the need to restore relations to the pre-9/11 level, adding that good relations between the US and Pakistan, and the Muslim ummah will help restore confidence and attain world peace. "With South Asia becoming the hub of international economic activity, restoration of peace in the region is all the more necessary," he observed.

 

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South Asia fair: China to provide 300 stalls to Pakistani exhibitors ​

KUNMING (February 12 2009): China is ready to provide 300 stalls to Pakistani exhibitors in the upcoming South Asian Countries Commodity exhibition to be held here in mid 2009, said a senior official. "Chinese government attaches great importance to south Asian countries in bilateral trade, especially with Pakistan", the Director of Foreign Trade Division of Department of Commerce of Yunnan province Cheng Yongliu told APP here in an interview.

The interview was arranged on the sidelines of the week-long plenary session of the 11th People's Congress of Standing Committee of Yunnan province that was kicked off on February 7 with the address of provincial Governor Qin Guangrong in, which he presented 2008 annual report and his government plan for 2009. It was for the first time that the foreign media had been invited to cover the provincial session of the People's Congress.

The objective of holding the fair is to provide opportunities to the south Asian countries to introduce their products in Chinese markets to help improve their trade imbalance, which is at present in favour of China. As a host city of the trade fair, Chen said that we are remained in contact with Pakistani side to ensure their maximum participation.

The 2009 edition of the exhibition will be concurrently held with famous Kunming Trade Fair from June 6-10. Our trade is based on three dimensions, the -- Foreign trade, Foreign Economy and Foreign Capital, he observed. He said that Yunnan province has long history of co-operation in diverse areas including trade as well as development of infrastructure in Pakistan.

In this connection he mentioned construction of water supply scheme in Karachi and Jinnah Highway Project. He said that negotiations were underway for well-equipped professional hospital in Islamabad. Cheng said that Yunnan exports chemical, industrial goods, raw material of laundry powder, agriculture products, tea, cooking oil, pharmaceutical products, etc to Pakistan.

A food-processing unit from private sector from Pakistan is functioning in Dali since 1990, he said. The bilateral trade, he pointed out has however witnessed an up and down trend, in this regard he stated that in 1996, it was $3 million, that jumped to $138 million in 2007, however the bilateral trade registered a decline last year as it was only $62 million.

Emphasising the need to enhance trade from Pakistan to his country, Cheng said that out of 9.6 per cent trade of south Asian countries with Yunnan province, Pakistan contributed just 0.6 per cent, so there is urgent need to improve. He said that Yunnan province has strong desire to help bring the trade ties with Pakistan as par with our deep bilateral relations.

 

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Industrial zones to be set up in all districts of Sindh: Khuhro ​

KARACHI (February 12 2009): The Acting Governor and Speaker, Sindh Assembly, Nisar Ahmed Khuhro has said that the government has planned to establish industrial zones in all district of the province Speaking at a meeting of the Karachi Chamber of Commerce and Industry (KCCI) on Wednesday, he said that the government has already allocated land for industrial zone in Larkana district.

He advised business community to come forward and establish industrial units, hotels at archaeological sites and in Sukkur, Larkana and other places and make efforts to revive closed units. Referring to the issue of interest rates, power and gas tariffs and inflation, the acting governor said that the government is well aware of these issues and assured that comprehensive strategy has to be developed to provide business community some relief.

Blaming the previous government for creating electricity mess in the country, Khuhro recalled that late Banazir Bhutto during her tenure, initiated IPP and added that lot of hue and cry was made at that time on six cents power tariff now negation were going on at 18 cents. However, if these IPP projects were not initiated at that time, present electricity supply situation might have been more serious, he claimed.

Further, he pointed out that during the last ten years, no efforts were made to utilise Thar coal for power generation. There are 14 points through river, where power plants can be established but no attention was paid to utilise this opportunity. Another opportunity, which the government has failed to utilise, is wind power generation. India is generating 3000 MW power from wind in its coastal belt near Pakistan. Whereas, Pakistan has so for managed to build a small wind power-generating unit at Jhmpir.

'Cost of lost opportunities is very high and we have to sustain it,' he added Referring to the National Finance Commission (NFC) award, the acting governor pointed out that the NFC is an issue of all the four provinces. Khuhro further recalled that when the PPP was sitting in the opposition in Sindh Assembly, it moved a resolution, which was supported by the MQM and was also adopted by the house for change in the NFC formula.

He said that new NFC award was due since long. However it is still not announced. The acting governor was of the view that Sindh sustained a loss of Rs 50 billion annually due to NFC award. He said that the PPP and its collation partner, MQM are working carefully and jointly to resolve all issues related to the province and national interest.

Former President, KCCI, Siraj Kassam Teli said that the business community is of the view that the NFC award should be based on revenue generation. 'The Sindh government must take NFC issue with the federal government to change the NFC award formula,' Khuhro added and assured that business community would support the provincial government on the issue.

The President KCCI, Anjum Nisar said that law allows the provincial government to establish up to 50 MW power units. He said that taking advantage of the law, Punjab government has allowed to establish three units of 49.5 MW and urged the Sindh government that it should also allow establishment of 49.5 MW units in the province and Karachi.

 

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First half of fiscal year 2009: oil production down 5.9 percent, gas up 1.2 percent ​

KARACHI (February 12 2009): The total hydrocarbon production in the country increased by 0.4 percent in the first half of FY09. The oil and LPG production of the country fell by 5.9 percent and 9.3 percent in this period to 68,184bpd and 1,403tpd respectively. The gas production on the other hand, increased by 1.2 percent to 4,023mmcfd.

Total production of OGDC, PPL and POL fell by 0.7 percent, 3.3 percent and 19.3 percent respectively during this period. Oil production of OGDC fell 5 percent mainly because of production falls in JV operated fields of 20.2 percent whereas the company's own operated fields registered a modest fall of 2.3 percent, Saad Arshad, an analyst at Invest Capital & Securities said.

The major contribution to the fall in oil production came from the Bobi, Chanda and Sono fields, while improved production was observed from the Kunar, Pasakhi and Mela fields, Saad added. The oil production of PPL inched up by 0.1 percent mainly due to its share from oil production of Mela. However, cumulative gas production for the first half of FY09 fell 3.5 percent to 977mmcfd owing to natural decline in Sui production.

POL's oil and gas production maintained its downtrend as it fell by 27 percent and 14 percent respectively. Oil production from the POL's own operated fields fell by 33 percent with the main contributor being the Pindori field (falling by 67 percent) while Pariwali 22 percent during this period.

 

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Establishing CNG stations: Argentina to provide technical assistance ​

ISLAMABAD (February 12 2009): Argentina would provide technical assistance for establishing high pressure CNG stations and running the CNG bus service in mega cities of the country. This was decided in a meeting of Argentina Ambassador Rodolfo Martin Saravia and the Vice President Galileo Argentina CNG Company Juan Ojanguren with the Federal Minister for Environment, Hameed Ullah Jan Afridi here on Wednesday.

Secretary Ministry Environment, Khushnood Akhtar Lashari was also present in the meeting. The minister apprised the visiting Ambassador that the government of Pakistan has planned to run 8000 CNG buses in 9 mega cities of the country. He said that deliberations in this regard are in advance stage and modalities for financing import and running the buses as well as setting up high pressure CNG stations are being worked out.

He said that Hydro Carbon Development Institute has been asked to establish a high pressure CNG stations as a pilot project. The minister said that the promotion of CNG culture in the country would not only provide cheap transportation to the commuters but also help control the air pollution.

The visitors told the minister that their country is very rich in the CNG station and busses technology and they are ready to provide technical assistance to Pakistan for such ventures. They said that the representative of the Argentina CNG Company would interact with the Ministry of Environment to work out the details for co-operation-PR