CNG prices set to increase by up to Rs22.33 per kg
Compressed natural gas (CNG) dealers announced on Friday that they would increase the fuel price by up to Rs22.33 per kilogramme with effect from Saturday following government’s decision on increasing the natural gas price.
“Dealers have decided to pass on the impact of gas price hike to end-consumers instead of going for a shutter-down strike,” CNG Station Owners Association of Pakistan President Malik Khuda Bux told.
The option of staging a strike was considered at various meetings of different CNG associations in order to protest against the increase in natural gas prices, but most of the dealers opposed that, meeting participants said.
Dealers increased the CNG price in the range of Rs16.30 to Rs22.33 per kg and it now stands between Rs98 and Rs104 compared to Rs81.70 per kg in Sindh on Thursday.
The government has revised upwards the gas supply price for CNG fuel stations by 40% to Rs980 per million British thermal units (mmbtu) from Rs700 earlier, according to the Oil and Gas Regulatory Authority’s (Ogra) notification.
All Pakistan CNG Association (APCNGA) Chairman Ghayas Paracha said Khyber-Pakhtunkhwa (K-P) and Balochistan-based dealers had increased CNG prices in the range of Rs109-115 per kg from Rs96 earlier.
In Punjab, the price of CNG remained unchanged at Rs125-126 per kg as the increase in natural gas price for fuel stations did not apply to dealers in the province who consumed the imported liquefied natural gas (LNG).
Paracha demanded that the government end discrimination against the CNG fuel industry. It kept gas price unchanged for the textile industry at Rs600 per mmbtu, increased it by 20% for other industries and jacked it up by 40% for CNG dealers.
“The government has passed on the burden of textile industry to CNG fuel dealers,” he alleged.
Paracha pointed out that the government kept petrol price unchanged to provide relief for the people, but increased the CNG price which was an environment-friendly fuel and widely used by consumers.
There are around 2,200 CNG filling stations and over two million cars and public transport vehicles run on the fuel in the country.
Urea rates increased by Rs130 per bag
Urea manufacturers have raised prices by around Rs130 per bag in an attempt to pass the impact of gas price hike on to consumers despite government assurances that the state will pay subsidy to them.
According to Pak-Kuwait Investment Company AVP Research Adnan Sami Sheikh, the manufacturers have raised urea prices by Rs130 per 50kg bag following the increase in natural gas prices by the government.
“In a bid to provide relief for farmers, the government is considering a price subsidy again. But the size and mechanism of it is yet to be determined,” Sheikh told.
Industry officials also confirmed the urea price hike.
“Some manufacturers with gas supply at concessionary rates are likely to benefit as the cost increase for them will be lower,” Sheikh said. “However, the price hike, especially the subsidy, usually hampers market dynamics as dealers try to extract maximum benefit from the situation. So, abnormal sales can be expected.”
Another Research Analyst Shankar Talreja of Topline Securities said the urea price had jumped from around Rs1,570 to Rs1,700 per bag.
In a notification, Fauji Fertilizer Company announced that the dealer transfer price of its Sona Urea would be Rs1,700 per bag while the retail price would be Rs1,740.
According to an industry official, other fertiliser companies follow Fauji Fertilizer in increasing or decreasing fertiliser prices. Meanwhile, officials have also confirmed price increase by Engro Fertilizers.
$474mn invested in Gwadar free economic zone
Gwadar Port Authority Chairman Dostain Khan Jamaldini has said that at least 30 companies in different businesses such as hospitality, banking, logistics and fish processing have entered the free economic zone in the port city with direct investment of about $474 million.
“The first phase of Gwadar free zone has already been inaugurated,” Jamaldini said in an interview with China Global Television Network on Friday.
Commenting on the progress and achievements over the years, he said the Gwadar Port connectivity, collection and production areas were now almost ready. “We are receiving a ship on a weekly basis from Cosco, a Chinese company which is one of the largest in the world,” he said. “It is calling at Gwadar Port regularly.”
He expressed hope that with the start of industrial production in the Gwadar free zone, the frequency of ships would increase.
“There are many corridors linked through the Belt and Road Initiative (BRI) announced by Chinese President Xi Jinping five years ago,” Jamaldini added. “However, the most viable, most active and most swiftly implemented component is the China-Pakistan Economic Corridor (CPEC).”
He pointed out that CPEC was linking Pakistan not only with western China but also with Central Asian countries. “CPEC became the flagship project of the BRI, aimed at providing new opportunities to the people of both countries,” he said. “It will give a fresh impetus to the Sino-Pakistan friendship.”
In 2015, the Gwadar Port was officially leased to China for 43 years. Since then, the port has been developed under CPEC at a cost of $1.62 billion with the objective of linking northern Pakistan and western China.
In 2016, construction began on the Gwadar Special Economic Zone. The multimillion-dollar Gwadar Port, a key component of CPEC, is now operational.
Govt sets targets for next 100 days to enhance ranking
Adviser to Prime Minister on Commerce Abdul Razak Dawood has described his experience of “begging” from Saudi Arabia for a financial bailout package as “awful”, vowing to put in his best efforts to make the country stand on its feet.
The adviser on Friday shared his feelings in a meeting convened to set targets for the next 100 days in order to improve the country’s ranking on the World Bank’s Ease of Doing Business Index.
“I was upset when we were flying to Saudi Arabia to seek support,” said the adviser while recalling those moments.
“Is this what our life is that we have come to a low where we will beg from others,” Dawood said, adding that a talented nation of over 200 million people deserved far better than this. “It was awful to beg from Saudi Arabia,” he said.
Prime Minister Imran Khan and his economic ministers had gone to Saudi Arabia to seek financial assistance to avoid an International Monetary Fund (IMF) programme. Information Minister Fawad Chaudhry had said the purpose of the visit was to seek investment.
However, things did not move as planned and no major breakthrough could be achieved during a follow-up visit of a Saudi delegation to Pakistan.
Without disclosing the purpose, Dawood said during the last two days government ministers met and showed the resolve to overcome the economic challenges.
Since the expiry of the last IMF programme, Pakistan’s economic condition has been deteriorating and China has so far saved the country from default on its international debt obligations.
Saudi Arabia had also provided $1.5 billion in cash grant in 2014 to help the then Pakistan government shore up foreign exchange reserves.
Before coming to power, Prime Minister Khan had vowed that he would not beg from other nations to run the affairs of the country.
The commerce adviser pointed out that in the 1960s the citizens of West Pakistan treated East Pakistan’s citizens as inferior but today Bangladesh had gone ahead of Pakistan in terms of exports, foreign exchange reserves and employment generation opportunities. “It’s a wake-up call for us,” said Dawood.
The adviser voiced hope that Pakistan would be able to improve its ranking in the upcoming Ease of Doing Business Report 2019. He said he had initially been told by the Board of Investment (BOI) that Pakistan would improve its current 147th ranking by at least 20 points.
“But now I am told that the improvement could be by only four or at best five notches as the World Bank does not accept most of the reforms that Pakistan has introduced.”
Pakistan introduced 70 reforms but the World Bank accepted only three, said the newly appointed BOI Chairman Haroon Sharif.
He said the World Bank’s review team did not accept many reforms due to negative response by survey respondents and some of the reforms were on the border line.
Sharif underlined that the ease of doing business was on top of the prime minister’s reform agenda.
PKR stable against dollar
The rupee remained stable against the dollar at Rs124.1/124.3 in the inter-bank market on Friday compared with Thursday’s close of Rs124.1/124.3. Following reports that China had agreed to immediately lend $2 billion to Pakistan, the rupee had appreciated against the US dollar. Prior to this, it had lost 22% of value since December 2017 after the central bank reportedly abstained from intervening in response to the pressure due to a widening current account deficit. The State Bank of Pakistan has maintained that the slide in the rupee’s value is due to supply and demand dynamics of foreign exchange in the inter-bank market. While it has promised prompt intervention in case of speculative or momentary pressures, the central bank will sit on the fence and let “market-driven adjustment in the exchange rate to continue to contain the imbalance in the external account and sustain a higher growth trajectory”, according to a statement.
Week-on-week: SPI rises 0.54pc
The Sensitive Price Indicator (SPI) for the week ended October 4, 2018 registered an increase of 0.54% for the combined income group, going up from 229.17 points in the prior week to 230.4 in the week under review. However, the SPI for the combined income group rose 2.02% compared to the corresponding week of previous year. The SPI for the lowest income group increased 0.4% compared to the previous week. The index for the group stood at 218.27 points against 217.39 in the previous week, according to provisional figures released by the Pakistan Bureau of Statistics. During the week, average prices of 17 items rose in a selected basket of goods, prices of seven items fell and rates of remaining 29 goods recorded no change.
Pakistan’s share in global halal trade just 0.25pc
Despite being a Muslim country, Pakistan’s share in the global Halal trade stands at a mere 0.25% which could be increased with the upgrading of Halal certification and provision of Halal storage facility.
This was stated by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Senior Vice President Syed Mazhar Ali Nasir while speaking at a seminar at the Federation House.
The aim of the seminar was to discuss the potential and opportunities for Pakistan in the global Halal market. The government was urged to establish the Pakistan Halal Development Authority (PHDA) at the national level for Halal certification and administration of the industry in order to promote Halal products in national and international markets. Nasir emphasised the need for spreading awareness of Halal products in Pakistan as they were not confined to food and beverages only.
“These include pharmaceutical products, cosmetics and a lot more and Pakistanis are not aware of this,” he said. “Hence, educating them about the importance of Halal commodities is necessary to promote such products in our country and at the global level.” He was of the view that the formation of PHDA was the need of the hour for monitoring exports and imports of Halal products.
Moreover, organisations like the Pakistan Standards and Quality Control Authority (PSQCA), Pakistan Council of Scientific and Industrial Research (PCSIR) and Trade Development Authority of Pakistan should also extend their support for the promotion and development of Halal industry.
12th five year plan: govt stated to include chapter on SMEs
The Islamabad Chamber of Commerce and Industry (ICCI) has urged the government to introduce a special chapter in its 12th Five Year Plan in order to address the economic challenges faced by the country and create more job opportunities for the emerging, skilled and semi-skilled workforce. ICCI President Ahmed Hassan Moughal said in a statement the government was in the process of preparing the 12th Five Year Plan for FY18 to FY23 and it should include a specific chapter on small and medium enterprises (SMEs) in the plan. He said this while exchanging views with a delegation of local markets during their visit to the chamber, sources say.