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Dec 04 - 10, 2000

Shell, PSO, Caltex to import diesel

Pakistan's government plans to stop managing the country's diesel imports from the second quarter of 2001 as part of the planned deregulation of the oil sector, an official at the petroleum ministry said on Tuesday.

The official said diesel imports would be handled instead by state-owned Pakistan State Oil (PSO), Shell Pakistan and Caltex Pakistan.

"PSO will handle diesel term imports, while Shell and Caltex will take care of spot tenders," the official said.

Until now, the Ministry of Petroleum and Natural Resources has been responsible for all Pakistan's imports of diesel, which amount to 5.6 million tonnes a year, to meet domestic demand of seven million.

Kuwait supplies 75 per cent of the volumes through a yearly tender. The rest is supplied through quarterly import tenders issued by the ministry.

The ministry has recently awarded a tender to buy 300,000 tonnes of diesel from Saudi trader Bakri for delivery in the first quarter of 2001.

"We expect that this will be the last tender we (the ministry) issue," said the official.

He said from the second quarter, Shell and Caltex Pakistan's second and third largest marketing oil firms respectively will issue import tenders.

PSO, the largest oil marketer, will handle the Kuwaiti term diesel import contract.

State media in August said Petroleum Minister Usman Aminuddin wanted diesel imports deregulated by December.

Gas sales accord signed

Pakistan on Saturday signed gas sales accord called "Bhit Joint Venture", for purchasing gas from Bhit field discovered in '97.

According to estimates, the field has gas reserves of about one trillion cubic feet (TCF) and the venture consists of Lasmo Oil with 40%; Kirthar Pakistan BV (a subsidiary of Premier Shell), 40% share and OGDC 20%.

Secretary Petroleum and Natural Resources, M. Abdullah Yusuf, chief executive LASMO, Joe Darby, managing director, Sui Southern Gas, Mukhtar Ahmed, Oil and Gas Development Co, Najam K. Hyder, and Peter Cockeraft of Kirthar Pakistan, BV signed the agreement.

The field was declared commercially viable in September '99. With the signing of the accord, LASMO shall commence the full-scale development of the field. The estimated investment to first phase is $260m.

Date for wheat tender extended

Pakistan's state commodity trading body on Thursday said it had extended the date for a wheat export tender to December 7.

An official of state-run Trading Corporation of Pakistan (TCP) told Reuters the date was extended from November 30, because of encouraging interest from African and Middle Eastern countries.

The TCP issued the tender in October for sale of 500,000 tonnes to international markets, after the country produced a record crop of 22 million tonnes in the last season. Originally the tender was to close on November 16, but it has been extended twice.

The government estimates the country has a surplus of 1.2 million tonnes. The official said the government has asked the TCP to export one million tonnes of wheat half of which will be covered by the tender.

Knitwear exports fall

Knitwear exports during Sept-Oct period registered steep fall of up to 20 per cent over the preceding two months (July-Aug).

The representative body of knitwear exporters, Pakistan Hosiery Manufacturers Association (PHMA), while expressing its concern over the dwindling exports has urged the government to immediately remove all hurdles confronting export trade.

The PHMA is particularly critical of SRO 417, which it claims to be highly damaging for export trade. The new sales tax refund rules under SRO 417, are difficult to be met and it has almost squeezed exporters' fund as no refund claims have been paid since June.

EPB chief for boosting exports

Chairman Export Promotion Bureau (EPB) Tariq Ikram has underlined the need for enhancing the share of non-traditional products in the national export to meet the target of $10 billion.

The EPB chief said under the new export policy, steps were being taken to increase the share of non-traditional items, which accounted for 47pc in the country's total exports.

EPB for widening export scope

Chairman Export Promotion Bureau (EPB) Tariq Ikram has asked exporters to explore other than traditional markets of Europe and North America.

He emphasized upon a need to diversify exports by exploring non-traditional markets of Africa and Middle East as well as central Asian states.

The fashion show organized by Pak Denim was largely attended by local and foreign buyers who were impressed with the quality and designs of denim wears.

Motor spirit, diesel import deregulation

Import of motor spirit and diesel will be deregulated by the end of March next year, completing the first phase of liberalization of petroleum sector, sources said.

The deregulation of the import of diesel by the end of December is not possible but the government has started preparations and allowed Pakistan State Oil to start importing diesel from January.

According to official sources out of a total annual demand of 7.5 million tons of diesel, 2.5 million will be met from the local sources and the remaining will be imported by the private sector.

The freight pool system, however, will continue till 2002, under which the POL products will be provided on equal rates all over the country.

The oil market companies, (OMC) will decide at their own whether to continue with the freight pool system.

Forex allowed

The economic coordination committee of the cabinet approved on Monday the export of cement, rice, pharmaceuticals, glass sheets, G.I. pipes and hardware items to Afghanistan and Central Asian Republics against irrevocable LCs in foreign currency.