Friday, 16 December, 2022 i 22 Jamadi awwal, 1444 i rs 15.00 | Vol Xiii no 167 i 12 pages i islamabad edition
Govt slashes petrol prices by rs10 per litre g
diesel price also reduced By rs7.5 g Bilawal contradicts Musadik’s per liter and kerosene By rs10 claiM of Buying russian oil
ISLAMABAD
t
Mian abrar
he federal government on thursday announced to fix the new price of petrol at rs 214.80 per litre with a reduction of rs10 in the price of petrol. while announcing a significant reduction in the prices of petroleum products in pakistan television news, finance Minister ishaq dar said that the new price of high speed diesel is rs 227.80 with a reduction of rs 7.50 per liter, and the new price of kerosene oil is rs171.83 with a reduction of rs 10 per litre. the Minister said the price of light diesel has been fixed at rs169 with a reduction of rs28.28 per litre. he said that the application of these prices in petroleum will be effective from midnight of december 15 to december 31, 2022. ishaq dar said that the decrease in the prices of petroleum products is due to the last quarter of this fiscal year which started on october 1st and continues till december 15th. he said that the reduction in petroleum prices is a part of prime Minister shehbaz sharif’s campaign to provide relief to the people and in this regard, the government is focusing its attention on providing relief to the people. Ministry sources, earlier reported that petrol is currently being purchased at $76 to
$77 per barrel. levy charges on petrol are rs50 per litre, while sales tax on all petroleum products remains zero. sources said that the profit margin of oil marketing companies might also be increased from december 16 on petrol and diesel. Dr MusaDik, Bilawal Make contraDictory claiMs on Buying cheaper russian oil: earlier this week, following a pakistani delegation visited Moscow, petroleum Minister dr Musadik Malik told media that russia has confirmed the crude oil availability of 100,000 barrels per day to pakistan, and that a delegation from Moscow would visit islamabad in January to set the terms of a deal, including rates and mode of payment. following his russia visit, Minister of state for petroleum Musadik Malik, who led the pakistan delegation, told a news conference that russia had confirmed the supply of petroleum products at a “discounted rate”. however, the state minister did not give any indication of the price. “russia has confirmed the availability of 100,000 barrels per day of crude oil supply but has not confirmed the rate yet which will be discussed in January,” a source in the petroleum ministry also said, adding that the visit was scheduled to take place on January 23, 2023. he had said that detailed terms and conditions of the discounted oil commodities would be settled during the upcoming visit of
the russian energy minister to islamabad by mid-January, but rates would be similar to the discount being given to other countries or even cheaper. Before that visit, the two sides would crystallize proposals to a stage where an executive summary or an agreement could be signed and supplies start flowing, Malik had added. pakistan struggles to meet domestic gas supply needs as winter approaches while battling to contain a current account deficit swelled by energy payments, mostly for oil. the country has been unable to procure liquefied natural gas from the international market because spot prices remain out of its range and shipments under long-term deals remain insufficient to match rising demand. dr. Musadik Malik on thursday again said the government held negotiations with the russian government to purchase crude petroleum oil products. he added that Moscow had even expressed its desire to sell out its petroleum products to pakistan at cheaper rates as compared to the international market. talking to a private news channel, the state minister said that coalition government was much concerned about the rising inflation, adding that efforts were being made to provide relief to the masses. the state minister maintained that after receiving the petroleum crude oil products from russia, the inflation would decrease. Bilawal says pakistan not pursuing russian oil: contrary to petroleum Minister dr Musadik Malik, foreign Minister Bilawal Bhutto Zardari — who is in the us for a seven-day visit — has announced that pakistan “is not pursuing or receiving” any discounted energy from russia. in an interview with journalists amna nawaz and Judy woodruff on ‘pBs newshour’ on december 14, the ppp chairman said: “as far as russia is concerned, we aren’t pursuing or receiving any discounted energy, but we are facing an extremely difficult economic situation, inflation, pump prices.” he, however, admitted that pakistan was facing energy insecurity. “we are exploring various avenues to expand our areas where we can get our energy from,” fM Bilawal said, adding that “any energy from russia will take a long time for us to develop.”
imran plotting against democracy to achieve his ‘ulterior motives’: sanaullah ISLAMABAD staff report
Minister for interior rana sanaullah on thursday said that pakistan tehreek-e-insaf (pti) chairman imran khan was “planning attack on the parliamentary system and democracy under his foreign agenda to ensure his return to power”. “imran khan attacked the federal capital with armed groups in a bid to blackmail the government, but he miserably failed to implement his nefarious political agenda and now he is bent on attacking the parliamentary system and democracy in pakistan,” rana sanaullah said in a news statement. the minister said imran khan wanted to achieve his “ulterior motives” and implement his “foreign agenda” by “attacking” the democracy which had no legal and con-
stitutional justification. “if we let the attack on the democracy succeed once, it will be repeated again and again,” he added. he said the parliamentary democracy, national and provincial assemblies and the constitution of 1973 were part of the system on which pakistan’s stability relied. rana sanaullah feared that the pti may make an “anti-democratic attempt” to return to power and achieve its political agenda. imran khan could opt for any “unconstitutional and undemocratic act to ensure his return to power”, he added. he warned the pti chief against his alleged ulterior motives which were aimed at “ruining the economy”. “we will democratically foil every plot of imran khan, which aims to destabilize pakistan politically and economically,” he said.
tis the season for hawala and hundi: gap spreads between interbank and open market g
why would anyone use official Means to send Money Back hoMe if they’re disadvantaged through a significantly low interBank rate? profIt report ariba shahid
remittances fall by a whopping 14% over last year, clocking in at $2.1 billion during november 2022 – the lowest monthly inflow since august 2020. falling every month since august 2022; remittances dropped 5% compared to october 2022. during the first five months of this fiscal year, remittances are down 10% for the same period last year; cumulatively equal to $10 billion. “the major reason for a decline in remittances is the 10% differential in the open market and interbank exchange rates. expats are getting 10% higher value for the same amount of remittances being sent via unofficial chan-
nels, leading towards a decline in official remittance figure,” says tahir abbas, head of research at arif habib limited. “exporters are holding back usd proceeds amid this widening currency gap. the governnment needs to crush this gap [interbank and open market] on war footing basis to aid exports as well as remittances,” says abbas. while interest rates around the world are rising and there is rising global inflation; it is important to note that the macroeconomic environment in the middle east is currently resilient to such adversaries. despite roughly 600,000 new immigrants to saudi arabia and uae in the past one year; pakistan is witnessing a 20% decline in remittances from both the saudi arabia and uae respectively. “these countries [uae and saudi arabia] are not witnessing economic chal-
lenges as such, which indicates that the gap between official and hawala/hundi rate is the major factor behind the decline,” says fahad rauf, head of research at ismail iqbal securities. hawala and hundi are used interchangeably. they are an alternative remittance system that operates outside formal banking channels. hawala is an arabic term while hundi is its indian and pakistani variant. last year the economic coordination committee of the cabinet also approved the national remittance loyalty programme (nrlp) in order to incentivize inflows of remittance through documented channels. remitters would get points based on how much they send back home and are classified as green, gold and platinum users. any money sent home through for-
g
no loyalty prograMMe or love for the country is More than love for Money
mal channels is eligible for the loyalty program, this includes funds received through rda and spent in pakistan. this means if you’re using rda for schemes such as roshan apni car, you’re not only getting a cheaper deal than locals but you’re also going to be getting loyalty points for it. when launched, the estimated financial impact that had been budgeted was based on the assumption that remitters equivalent to 25% of the remittances as of fy 21 will register for nrlp, is rs. 13.107 billion for fy22. why is the spread so high between the open market and interbank? the growing divide in the interbank and open market rates penalizes people for using official channels to send money to pakistan. hawala and hundi operators offer a better rate based off
the open market rate as opposed to the interbank rate. as the open market is in a crunch for dollars; the hawala and hundi operations in the country further aggrevate the supply shortage faced by it. a reason for the growing divide between the two rates is primarily because in other countries, people only go to exchanges when they are traveling and need the other countr y ’s currency. people don’t really buy and hoard physical notes of other currencies. logically, the open market rate goes up when there is a demand for foreign exchange. this could be when people are traveling more, going abroad to study, or even when people are trying to dollarize their savings.
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