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Express Tribune
14-06-2025
- Business
- Express Tribune
Fertiliser reaches Gwadar via transit trade
Listen to article Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry on Saturday welcomed the successful berthing of the second Afghan transit trade ship at Gwadar Port. The vessel, carrying 20,000 metric tons of di-ammonium phosphate (DAP) fertiliser, marks another milestone in enhancing regional trade connectivity. He noted that the fertiliser shipment originated from Townsville, Australia and represented the second successful docking under the revised Afghan transit trade framework, following the arrival of MV Beyond 2 on February 4, 2025. "This is part of our sustained efforts to operationalise Gwadar Port as a strategic trade gateway for landlocked Afghanistan," the minister remarked. "Gwadar's growing role in transit trade reflects our commitment to enabling smooth access for Afghanistan to international markets." He emphasised that the recent decision by the Economic Coordination Committee (ECC) to replace the bank guarantee requirement with an insurance guarantee for Afghan transit trade through Gwadar had significantly improved ease of doing business and expedited cargo clearance processes. He added that the arrival of MV ASL Rose was a strong indicator of increasing international trust in Gwadar's operational readiness and infrastructure, highlighting Pakistan's role in promoting efficient and reliable transit trade in the region. Junaid Anwar directed Gwadar Port authorities to ensure quick berthing and seamless cargo unloading and reiterated that the port was fully equipped to handle rising volumes of transit goods under the Afghanistan-Pakistan Transit Trade Agreement (APTTA). He expressed confidence that the development would help lower transit costs, increase trade efficiency and reinforce economic ties between Pakistan and Afghanistan.
Express Tribune
11-06-2025
- Business
- Express Tribune
NA nod sought for Rs345b spending
Listen to article The government has sought ex-post facto approval from the National Assembly for nearly Rs345 billion in additional spending incurred during the current fiscal year without prior parliamentary approval. No war-related expenditures with India were booked in the accounts. A Rs60 billion supplementary grant was allocated for defence purposes in the outgoing fiscal year, but it was not war related. Pakistan's armed forces met war-related expenses with India from their regular approved budgets, said Finance Minister Muhammad Aurangzeb. The National Assembly's approval is being sought along with the new budget. While the Rs344.6 billion figure appears high, especially against the government's claim of strict expenditure control, it is still lower than in the previous fiscal year. Under the Constitution, the federal government can approve supplementary grants for unforeseen expenditures without prior National Assembly approval. However, it must later follow the same approval process as for the new budget. Over time, this constitutional provision has been used routinely rather than exceptionally. Details show that Rs345 billion in additional spending was incurred on unbudgeted items by diverting funds from other heads. This has not impacted the overall budget size, but the volume of these grantsmost approved by the Economic Coordination Committee of the Cabinetreflects poor budgeting and financial control. Under the $7 billion International Monetary Fund (IMF) bailout package, the federal government has committed that – in order to ring fence the fiscal programme – no supplementary grants will be allowed beyond the approved budget, except in case of severe natural disasters. It has also pledged to seek ex-ante approval from the National Assembly for any spending exceeding budgetary appropriations. Sources said discussions also took place at the IMF level about discouraging supplementary grants made through internal fund reallocation, to improve fiscal discipline. The Pakistan Muslim League-Nawaz (PML-N)-led government approved these additional grants for all kinds of expenditures, including power subsidies, the Special Investment Facilitation Council (SIFC), armed forces, helicopter repairs, hosting the Shanghai Cooperation Organisation (SCO) summit, and discretionary spending on parliamentarians' schemes and civil armed forces' capacity building. The single largest supplementary grant was for power sector subsidies, accounting for 37% of total additional spending. The government gave Rs115 billion in supplementary grants to pay independent power producers, while Rs308 million was allocated for structural reforms in the power sector. An additional Rs14 billion was given to settle liabilities for solarising agricultural tube wells. A Rs258 million grant was issued for financial compensation to families of Chinese nationals killed in a terrorist attack that Pakistani authorities attributed to foreign involvement. The government allocated Rs59.5 billion to the armed forces in supplementary funding. This included Rs23.3 billion for Pakistan Army's counter-terrorism capacity enhancement, Rs8 billion for defence force projects, and Rs7 billion for the Jinnah Naval Base in Omara, according the finance ministry's budget book. Additionally, Rs8 billion and Rs4 billion were allocated for the Special Security Division South and North, respectivelyunits that have existed for years and should be part of the regular budget. The government also approved Rs5 billion for internal security duty allowances and Rs2 billion for technological upgrades at the Inter-Services Public Relations (ISPR). A Rs1.3 billion supplementary grant was provided for fence maintenance along the Afghanistan and Iran borders, while Rs800 million was allocated for developing the naval air station in Turbat. Another Rs1.8 billion supplementary grant has been allocated toward overhauling engines of VVIP aircraft, according to the finance ministry's budget documents. The Reko Diq mining project received Rs3.7 billion in additional funds. A Rs1 billion grant was given for hosting the SCO summit, as per the budget book. Despite some concerns, Rs2 billion was allocated to restructure Pakistan Revenue Automation Limited (PRAL) — a company and not a federal entity. An additional Rs2 billion was granted for Federal Board of Revenue (FBR) officers, and Rs1.6 billion for setting up anti-smuggling posts. For transition accommodation of FBR officers, Rs430 million was approved, and Rs869 million was provided to enhance the organisation's operational efficiency. Despite this, the FBR has posted a record Rs1.03 trillion shortfall in tax collection for the current fiscal year, with one month remaining. A compulsory Rs1.3 billion grant was given to the Election Commission of Pakistan for holding local government elections. Rs7.2 billion was allocated for Sindh-specific discretionary spending on small schemes and for operationalising the Green Line Bus Rapid Transit project. The interior ministry received a Rs4.3 billion development grant for initiatives such as transforming the National Forensic Agency, building women's facilities in tribal areas, setting up check posts, and launching water supply schemes. A Rs30 billion supplementary grant was provided for flood-affected areas of Sindh, and Rs19.2 billion was allocated for small development schemes executed by the now-defunct Pakistan Public Works Department. Sindh also received Rs9 billion in additional financial support for projects, but the finance ministry did not detail the projects. An additional Rs7 billion was given for parliamentarians' schemes and Rs23.4 billion grant was approved for the federal Directorate of Immunisation.
Express Tribune
11-06-2025
- Business
- Express Tribune
Govt sets record petroleum levy target at Rs1.47tr
Listen to article The government has set an ambitious target for petroleum levy (PL) on petroleum products for the next fiscal year, which would result in denying consumers relief despite a reduction in international oil prices. The Economic Coordination Committee (ECC) recently increased the maximum cap of petroleum levy to Rs90 per litre. Keeping in view the higher limit of the petroleum levy, the government has decided to increase the revenue collection target on account of PL on petroleum products. According to budget documents, the government has raised the petroleum levy collection target by 26% for the next fiscal year. The government has set a petroleum levy collection target of Rs1,468.395 billion for the upcoming fiscal year. This represents a substantial rise of Rs307.395 billion compared to the current revised estimates of Rs1,161 billion for the ongoing fiscal year. It is also considerably higher than the original budgeted PL target of Rs1,281 billion for the outgoing fiscal year 2024-25. The PL revenue has been given high priority by successive federal governments as it is not part of the Federal Divisible Pool (FDP) that must be shared with the provinces under the National Finance Commission (NFC) formula. This is why the government has increased the rate of petroleum levy on petroleum products while maintaining a zero rate of general sales tax, thereby depriving the provinces of revenue collection. A budgeted target of Rs105 billion has been set through the imposition of a levy on Off-the-Grid (Captive Power Plants) for the next fiscal year. The National Assembly passed the "Off-the-Grid (Captive Power Plants) Levy Bill, 2025." This levy will initially be 5%, increasing to 10% by July 2025, 15% by February 2026, and 20% by August 2026. The government has also proposed to increase the Gas Infrastructure Development Cess (GIDC) collection to Rs2.4 billion for the next fiscal year, up from the revised current estimate of Rs1 billion. The GIDC was originally budgeted at Rs2.5 billion for the current fiscal year. The previous Pakistan People's Party (PPP) government imposed this cess to generate revenue meant for building mega oil and gas pipelines. However, the textile industry and other industrial barons obtained stay orders, and the issue was taken up by the Supreme Court of Pakistan during the Pakistan Tehreek-e-Insaf (PTI) government. In June 2020, the Supreme Court of Pakistan ruled that various sectors of the economy must clear outstanding GIDC payments worth Rs407 billion in instalments, but the government failed to receive payments due to industries obtaining stay orders again. Natural Gas Development Surcharge (GDS) — the difference between the prescribed and sale price of gas that goes to provinces — has also been projected to bring Rs49.437 billion in revenue next year against the original budgeted Rs25.618 billion and revised Rs48 billion in the outgoing fiscal year. The government has also envisaged collecting Rs5 billion in PL on Liquefied Petroleum Gas (LPG) in the next fiscal year 2025-26, compared to the revised target of Rs3.156 billion for the current fiscal year. The original budget for the PL on LPG in the current fiscal year was Rs3.537 billion. The budget for fiscal year 2025-26 also envisages Rs30 billion to be retained as a discount on local crude oil prices. This is higher than the revised estimate of Rs25 billion for the current fiscal year. The original budget for the current year was also Rs25 billion. The budget for next year also proposes an increase in royalty on crude oil and natural gas for provinces. The budgeted amount for royalty on crude oil is set at Rs69 billion for the next financial year against the revised estimate of Rs64 billion for the outgoing year. The government budgeted Rs38 billion in royalty on natural gas in the next financial year against a revised target of Rs135 billion and an original budget of Rs103.751 billion in 2024-25. Next year's budget envisages Rs20 billion on account of windfall levy on crude oil against a budgeted amount of Rs28 billion for the current financial year 2024-25. Windfall levy on gas has been budgeted at Rs450 million, which was also the revised estimate for the current fiscal year.
Business Recorder
31-05-2025
- Business
- Business Recorder
Ministry seeks ECC nod for new OMCs, dealers' digitisation
KARACHI: The Petroleum ministry is set to send a summary to the Economic Coordination Committee (ECC), in near future, for imposition of additional fees for oil marketing companies (OMCs) and dealers to digitize supply chain and petrol pumps in a bid to curb fuel smuggling. While talking to the media during his visit to the Sui Southern Gas Company Limited (SSGC) on Friday, Federal Minister for Petroleum Ali Pervaiz Malik said that the additional fee will be added to the price of petroleum products. However, he claimed that the imposition of fees would not lead to an increase in fuel prices. He mentioned plans to digitize the petrol pumps and supply chain system within the next 6-12 months. Minister said that the cost will be utilized to digitize vehicles transporting oil to pumps and petrol pumps to detect and discard smuggled diesel and other petroleum products. The digitization plan involves using radar-based technology, digital nozzles, and installation of CCTV cameras to monitor the supply chain. For this, the ministry will send a summary to the Economic Coordination Committee (ECC) within two months, seeking approval for the additional fee, which is expected to be around Rs1.35 per liter for OMCs and Rs1.40 per liter for dealers. The minister elaborated that the government has already registered all petroleum products nationwide in phase-I and plans to fully digitize trucks transporting petroleum products over the next two to three months. The nozzles will also be fully digitized in the next few months. The minister highlighted the importance of ensuring a consistent supply chain of energy products, making them competitive in the international market, and ensuring sustainability. He also mentioned the upgrading of the oil refineries to produce clean energy for a better environment. Malik further informed that the government is working to curb smuggled diesel with the help of border law enforcement forces and restructure the Oil and Gas Regulatory Authority (OGRA) as well. Federal Minister for Energy Pervaiz Malik has expressed optimism about the country's economy, citing signs of early recovery in the form of lower inflation, reduced electricity tariffs, and decreased petroleum and diesel prices. In a press briefing at SSGC head office on Friday, Malik also acknowledged that the government still faces significant challenges, particularly in the energy sector. 'Accumulation of circular debt and stopping losses in the gas sector are complex issues that require immediate attention,' he said. Despite these challenges, Malik expressed confidence that the government is making progress. 'We want to put Pakistan on a sustainable, inclusive, developed, and climate-friendly journey, and for this, the energy sector is being organized,' he said. However, Malik expressed concern over power producers not honoring their commitments to lift imported gas (RLNG) for electricity generation, which is contributing to the circular debt. The ministry might consider acquiring bank loans to reduce the circular debt, he added. The minister emphasized that the government is committed to providing relief to the public and ensuring the country's economic progress. Copyright Business Recorder, 2025
Business Recorder
20-05-2025
- Business
- Business Recorder
Net-metering connections: govt plans to digitalise process with new online portal
The government is planning to 'simplify and digitalise' the process of applications for new net-metering connections through a new online portal, it was learnt on Tuesday. In this regard, Energy minister Sardar Awais Ahmad Khan Leghari chaired a meeting on Monday to review the provision of new net-metering connections, according to a ministry statement. 'Immediate and effective solutions must be found for the issues faced in this process,' the minister was quoted as saying in the statement. He emphasised making the procedure for 'new applications simple, transparent, and user-friendly'. Leghari says govt to 'rationalise net metering,' aims to ease burden on consumers According to the statement, employees of electricity distribution companies be provided with 'necessary training regarding the new portal and that practical demonstrations also be conducted'. 'An awareness programme should be developed to educate electricity consumers about the use of the portal and its transparency,' Leghari said. Earlier this year, the government announced to reduce the buyback rate for net metering electricity to Rs10 per unit from Rs27 per unit, attributing the decision to 'significant increase in the number of solar net-metering consumers, with associated financial implications for grid consumers'. However, after backlash, the government later decided to broaden the scope of consultation on the Solar Net Metering Regulations approved by the Economic Coordination Committee (ECC) and re-submit the recommendations to the federal cabinet after taking further feedback from all stakeholders.
