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June 18 - 24, 2001

Petrol prices up by 14.5%

The government on Wednesday increased petroleum prices by 9.4 per cent to 14.5pc with immediate effect and authorized Oil Marketing Companies (OMCs) to adjust these prices on a fortnightly basis from July 1.

Petroleum Secretary M. Abdullah Yousaf said the revision had been approved by the cabinet at its meeting held and added that it was the last time the government was announcing the petroleum prices. Referring to the deregulation of prices, he said it was a "big step" towards deregulation of the petroleum sector. The cabinet decision involved four aspects: increase in petroleum prices, authorization of the OMCs to fix future prices, change in internal freight equalization margin to link local refinery prices to those fixed by the OMCs, and replacement of petroleum development surcharge with a petroleum levy on the product basis.

The secretary said that in addition to the product-wise fluctuation in international prices, the government had taken into account 3.84pc devaluation of currency during the March-May quarter to fix the new prices.

The new prices would be applicable to 29 depots in various parts of the country, and consumers would be charged after adding the transportation cost (from the depot to the retail outlet) to the prices, ranging from 6 paisa per litre to Rs1.90 per litre. The OMCs that were already importing and marketing oil products would adjust the prices in future according to international market fluctuation, said the secretary, adding that the depot prices would remain uniform as all the five OMCs would jointly fix the prices.

He did not agree with the suggestion that the consumers had been left at the mercy of the OMCs to set prices of their choice, saying major components of the oil prices had already been fixed by the government and would remain unchanged.

SBP raises T-bills yield

The State Bank on Wednesday raised the cut-off yield on treasury bills of different tenures by 74-87 basis points to reinforce an earlier signal of tightening the monetary policy. Earlier on June 6, SBP had enhanced its discount rate by one per cent to 14 per cent.

This tightening of monetary policy is aimed at defending the declining rupee by making speculative dollar holding too expensive for banks and their clients. SBP has raised the cut-off yield on three-month and six-month T-bills by 86 and 87 basis points to 12.10 and 12.46 per cent respectively.

And it enhanced the cut-off yield of one-year T-bills by 74 basis points to 12.74 per cent at fortnightly auction of the bills held on Wednesday.

The central bank sucked in Rs 10.9 billion by selling treasury bills of different tenures in a fairly liquid money market against the target of Rs 12 billion. Bankers said the central bank had to raise the T-bills yield in its effort to meet the pre-auction target.

Gold price plunges to Rs 5,765

Gold price plunged to Rs5,765 on Tuesday from Rs5,847 on June 9 shedding Rs82 per 10 grams. A spokesman of Karachi Saraf and Jewellers Group (KSJG) attributed the fall to the downward trend in global gold prices , which is now being quoted at $270 per ounce after touching at $274 on Saturday.

Bullion dealers said that the price of ten tola bar also fell by Rs800 to Rs67,400 on Tuesday from Rs68,200 on Saturday. "Gold price will continue to fluctuate till the international prices settle down," a bullion dealer said. Imports of around 10,000 tola per day mainly by three to four parties have been suspended since May 21 and the market is currently relying on the local stocks, which, according to bullion dealers, are quite enough to cater to the temporary demand in the wake of marriage season after Rabi-ul-Awwal.

SBP gets $350mn

The State Bank of Pakistan on Thursday received $350 million disbursed by the World Bank as Structural Adjustment Credit (SAC). "Yes, the amount of $350 million has been disbursed to us today by the World Bank," confirmed the SBP Governor Dr Ishrat Hussain.

Rupee firm

The rupee on Thursday remained firm in inter-bank market despite a $13 million outward remittance by a single foreign bank. Bankers said the rupee closed 62.90/63.00 to a dollar showing almost no change overnight but up 20 paisa from the Tuesday close of 63.10/63.20.

Balochistan Glass

On Monday (June 11) Balochistan Glass Limited told the Karachi Stock Exchange that the Securities & Exchange Commission of Pakistan (SECP) had given its approval to double the company's paid-up capital from Rs55 to Rs110 million, through the issue of fresh equity to the foreign shareholders. The company proposes to issue eleven million new shares at face value of Rs5 per share to foreign shareholders, without the issue of right shares to existing shareholders of the company.

PTC suffers

Pakistan Tobacco Company Limited (PTC) has reported a post-tax loss of Rs885 million during the year ended December 31, 2000. "For each of the last six years the company has been losing money with accumulated losses for this period at Rs1.7 billion.

$60 million for SAP

The World Bank has decided to extend 60 million dollars to Pakistan for the Social Action Programme (SAP-II). "I am pleased to inform that the International Development Agency (IDA) is in a position to disburse on the SAP-II as all outstanding financial management issues have been resolved to enable the disbursement to proceed.

We will immediately process disbursements for the withdrawal applications that have been submitted to us", says Abid Hasan, Acting Country Director of the World Bank for Pakistan and Afghanistan.