INDUSTRY

 

Dec 28 - Jan 05, 2003

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

STRATEGIC OIL RESERVES TO BE DOUBLED TO 2 MILLION TONS

The country plans to double its strategic oil reserves to two million tons over two years from the current one million tons.
Sources told that oil companies were directed last month and again around a fortnight ago to raise their reserves to 1.5 million tons, equivalent to 21 days of consumption, to face the eventualities arising out of a possible United States attack on Iraq.

 

The Water and Power Development Authority and the Karachi Electricity Supply Company were asked to increase their storage to 60-day consumption so that electricity rates did not go up unnecessarily in case of oil price increase, the source said. The US attack could impact the country in terms of supply and price hike.

The oil companies are boosting their reserves but Wapda is far behind the target. Its storage is hovering around 12-15 days consumption, they said.

The country has historically been maintaining 15 days of strategic reserves or one million tons but was warned last year by the relevant quarters that it should be raised up to 45 days requirement or there million tons before the privatisation of Pakistan State Oil. It was, however, agreed that reserves should be raised in phases.

The oil companies are awaiting the government's approval to a plan they want to implement to increase the reserves.

The infrastructure development for the increase could cost up to Rs4 billion. One of the important suggestions of the plan is reduction in number of oil storage depots to 10 from 29. This will mean an increase in prices of petroleum products in far-flung areas.

The government has deregulated the oil pricing mechanism, which entails fixation of the rates by the marketing companies for the 29 central depots. As a result, prices at outlet level now vary by 10 to 40 paisa per litre in different areas on the basis of transportation cost.

The country's current oil refining capacity is around 12 million tons while another 6.5 million tons are imported, that annually cost $3-3.5 billion.

GAS PIPELINE TO BENEFIT REGION, SAYS KHATAMI

Iranian President Seyed Mohammad Khatami has underscored the importance of enhancing regional economic and trade cooperation, saying that the proposed multi-billion dollar "project of laying a gas pipeline from Iran to India via Pakistan will bring peace and friendship in the region."

Addressing a function organized by the Federation of Pakistan Chambers of Commerce & Industry, the president said: "Iran considers the (gas pipeline) project a major project on the national level and regards it as a symbol of strategic economic ties with Pakistan. The implementation of the project will benefit all the people of the region."

SICK UNITS SURVEY UNDER WAY

The ministry of industries is conducting surveys to work out the viability of the 'unintentionally' sick industrial units in the public and private sectors to revive and generate economic activity in the country.

This was stated by Federal Minister for Industries Liaqat Jatoi while speaking at a meeting with the members of the Lahore Chamber of Commerce and Industry. He said that only those sick industrial units, which would have the capacity to run and give profit, would be revived.

FRUIT STORAGE FACILITY

The Export Promotion Bureau, NWFP, will establish a fruit storage, processing/treatment and packaging facility in the Frontier province to increase export of fruits from the Frontier province.

According to an EPB press release issued, Small and Medium Enterprise Development Authority (Smeda), NWFP, had been assigned the task to prepare a feasibility study.

An agreement on conducting feasibility study has also been signed between EPB and Smeda.

"The establishment of the facility would provide specialized services in the field of grading, treatment, processing, storage and packaging practices," contained the press release.

JAPAN OFFERS HELP FOR TORKHAM HIGHWAY

Japan has offered to assist Pakistan and Afghanistan in the construction of Torkham-to-Kabul dual carriageway to facilitate trade and reconstruction of the war-battered country

An official source told that the Japanese Bank for International Cooperation (JBIC) has indicated to finance the road from Torkham to Kabul through Jalalabad and has asked Pakistan to provide project details and cost estimates as soon as possible.

The state-run National Highway Authority (NHA) is separately planning to repair the highway between Peshawar and Torkham, which is currently in a very dilapidated condition.

STRATEGIC ASSETS ON PRIVATIZATION AGENDA

Privatization is a complicated and very complex business. It requires a well thought-out strategy, that sets priorities and schedule for sale of state assets in fast changing investment environment.

The sell-off process becomes more intricate, difficult as well as sensitive when strategic assets are put on the privatization agenda. Its handling requires more sophisticated skills. It is not a simple retail sale. It is a sale of a strategic asset to a strategic investor.

EXPANSION OF PS CAPACITY ON CARDS

The government has decided to expand the capacity of Pakistan Steel which is not sufficient to meet the growing demand of steel products.

Official announcement issued, said the expansion would be executed in phases with each phase to be commercially and financially viable based on current lower rate of tariff protection.

It has been planned to increase the production of value added products first and then enhance the iron making capacity through backward integration. According to the announcement, the planned expansion would be financed from Pakistan Steel's own resources without any burden on the national exchequer.