Profit AS PETROL DEALERS DEFER STRIKE, LPG SELLERS GO ON PROTEST In partnership with
Rs 15.00 | Vol XIV No 22 I 8 Pages I Islamabad Edition
Saturday, 22 July, 2023 I 3 Muharram, 1445
STATE MINISTER MUSADIK MALIK CONVINCES g WHILE LONG QUEUES SEEN AT PETROL PPDA TO DEFER PROTEST FOR TWO DAYS PUMPS, LPG SELLERS GIVE PROTEST CALL
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ISLAMABAD
STAFF REPORT
HILE the federal government was able to convince Pakistan Petroleum Dealers Association (PPDA) to delay its strike for two days, the LPG dealers announced to observe strike across country. PPDA deferred strike to shut fuel pumps across the country for two days following successful negotiations with State Minister for Petroleum Musadik Malik, who arrived in Karachi earlier Friday in a bid to convince the PPDA to call off the nationwide strike. While long queues seen at petrol pumps on Saturday due to the strike call given by the PPDA and the deferment of the strike call even failed to convince people not to buy fuel. In a statement, the PPDA said they might hold another round of negotiations with the government after two days. A day earlier, the PPDA announced shutting down fuel pumps across the country from July 22, demanding an increase in profit margins amid an inflation crisis. “We will shut down all petrol pumps across Pakistan on July 22, 6pm,” said the association, which further says it has more than 10,000 members. In a statement, the association said the petroleum minister was informed about their concerns but to no avail. The official communique said interest rates and inflation have hit operators’ businesses and called for the dealership margin to be increased. It said sales have slumped by 30% due to Iranian fuel being smuggled into the country. “Around 8,000-9,000 (operators) …
represented by us, will be shut on July 22,” Abdul Sami Khan, chairman of the association, told Reuters. The association said the supply of petrol will remain suspended until the demands are met. Pakistan is dealing with a weakening currency and a prolonged period of inflation with the national rate hitting 29.4% in June, down from a record high of 38% in May. Earlier in May, Pakistan’s oil industry had sought Rs12/litre margin on highspeed diesel (HSD) and Mogas (petrol) for oil marketing companies (OMCs) in view of the high cost of doing business, which has created financial hardships. On April 30, 2022 petroleum review, the OMCs margin on HSD was Rs6.50/litre whereas it was Rs6/litre on Mogas. Apart from the OMCs’ margin,
Bandial allows withdrawal of curative review against Isa ISLAMABAD
STAFF REPORT
Chief Justice of Pakistan (CJP) Justice Umar Ata Bandial on Friday approved the PDM government’s plea to withdraw a curative review reference filed by the ousted Pakistan Tehreek-i-Insaf (PTI) government against Supreme Court judge Justice Qazi Faez Isa. The previous government had filed the curative review reference after the top court quashed its initial Supreme Judicial Council (SJC) reference against Justice Isa for not disclosing his family’s foreign assets in his wealth statements. Justice Bandial had reserved his decision on the plea in April, with the PDM government arguing that “there is no room for a second review or curative review” in the Constitution. In the detailed order released today, Justice Bandial accepted the government’s position and ruled that “curative review has no standing in our jurisprudence”. “In the present case, no Hon’ble Member of the Bench that delivered the Subject Judgment (nor any other Judge of the Court) has so far considered it necessary to re-visit, review or set aside that judgment on the ground that it has had a significant impact on the Fundamental Rights of citizens; or that it is in the interest of the public good; or that it is per incuriam. “Consequently, in the absence of such a judicial view and the lack of an enabling jurisdiction that allows an aggrieved or concerned party to file a second review, the appellant’s curative review petitions appear to be not maintainable,” Justice Bandial wrote in the order. The CJP stated that the ordinary course of action would have been to refer the matter to the top court for a conclusive determination on its maintainability, but the appellants had sought the withdrawal of their curative review petitions. “The instant Civil Misc. Applications filed by the appellants are accordingly allowed and their curative review petitions are dismissed as withdrawn,” the order concluded.
dealers were charging Rs7/litre margin on HSD and Mogas The oil industry has been facing severe challenges since last year because of the increased cost of doing business. The reasons vary from increased fuel prices in the international market and exchange rate to increased interest rates (leading to inventory holding cost of around Rs3/litre), credit letter confirmation charges leading to higher demurrages, and high turnover tax (0.5 per cent) etc. The oil body pointed out that the margin for HSD and Mogas has been revised to Rs6/litre during the current year based on the decision taken by the Economic Coordination Committee (ECC) dated October 31, 2022; however, the same is insufficient and needs to be reviewed urgently.
LPG DEALERS GO ON STRIKE NOW: Meanwhile, the sellers of liquefied petroleum gas (LPG) on Friday announced a strike against the sale of the commodity at fixed government prices. Chairman LPG Industries Association Karachi Irfan Khokhar said that there will be a shutter down strike across the country from August 5. He added that LPG is not being sold anywhere in the country at the fixed official price, adding that due to black marketeering, the gas is being sold at higher prices. Khokhar also added that the price per kg is Rs178, but LPG is being sold at Rs220 to Rs350 per kg, while the local gas company is selling LPG at a price of Rs100,000, which is more than the fixed price per ton. The chairman added that the annual consumption of LPG is 1.8 million tons, 40% of which is met by local production. The announcement comes just a day after petroleum dealers in Pakistan issued a warning to close down filling stations across the country indefinitely, starting from July 22 morning. The decision came after the outgoing government failed to honour its commitment to increasing profit margins of the dealers, leaving them dissatisfied with the current situation. Speaking at a press conference held at the Karachi Press Club, Pakistan Petroleum Dealers Association (PPDA) Chairman Samiullah Khan expressed their frustration over the government’s inability to raise their profit margin to 5% on the sale of two major petroleum products. Currently fixed at Rs6 per litre (2.4%), the 5% margin would amount to over Rs12 per litre given the prevailing petrol and diesel prices of Rs253/litre and Rs253.50/litre, respectively.
Military trials of civilians should not begin without informing SC: CJ Bandial ISLAMABAD
STAFF REPORT
Chief Justice of Pakistan (CJP) Umar Ata Bandial said on Friday that the trial of those involved in May 9 violence should not begin in military courts without informing the Supreme Court (SC). He made the remarks as a six-member bench, headed by him and consisting Justice Ijazul Ahsan, Justice Munib Akhtar, Justice Yahya Afridi, Justice Sayyed Mazahar Ali Akbar Naqvi and Justice Ayesha A. Malik, resumed hearing a set of pleas challenging the military trials of civilians. During today’s hearing. Latif Khosa, the lawyer for petitioner Aitzaz Ahsan, stated that whatever was happening in the country today had taken place during the tenure of former military dictator Ziaul Haq. “You can’t compare the present era with the era of Ziaul Haq. This is not Ziaul Haq’s era nor is martial law imposed in the country. Even if a martial law-like situation arises, we will intervene,” CJP Bandial said. CJP Bandial said the SC should be informed before military trials of civilians begin. “The trial of the accused in military court’s should not begin without informing the SC,” he said. At the previous hearing, the apex court had provided another opportunity to Attorney General for Pakistan (AGP) Mansoor Usman Awan to seek fresh instructions from the government about the provision of appeal against the sentence to be awarded by military courts to those found guilty of May 9 violence and arson. The observations came when the AGP said the government was willing to follow any suggestions to improve the process of trial by military courts if the SC issued directions to ensure provision of appeal against convictions and that the sentence should be
awarded with reasons. At the outset of the hearing, AGP Awan came to the rostrum and said that the apex court had issued him directives at the last hearing. He said that he had spoken about the “organised” plan behind the violent events of May 9. “From the video clips shown in court, it is evident that a lot of people were involved in the events of May 9,” he said. “Despite the large number, after exercising caution, 102 people were pinpointed for court martial,” he said. He reiterated that such an incident had occurred in the country for the very first time. He said that an airbase was attacked in Mianwali, adding that it could also have taken place at the ordnance factory. “We have to prevent such incidents [from taking place] in the future,” the AGP said. “There is a difference between a civil crime and a crime committed by a civilian,” Awan said. At one point, Justice Naqvi asked how it was decided who would be tried in military courts and who wouldn’t. Awan said that offences under Section 2(1)(d) of the Army Act would be tried in military courts. “Is the Army Act outside the bounds of fundamental human rights?” asked Justice Afridi. The AGP responded in the affirmative, saying that fundamental rights were not applicable on the Army Act. Awan argued that there was mention of the Army Act being applicable to civilians even before the 21st Amendment. “From your arguments, it appears as if fundamental rights have ended,” Justice Akhtar remarked. He then proceeded to ask whether Parliament could amend the Army Act, to which the AGP replied in the affirmative. “The law should be in context of fundamental rights,” Justice Akhtar said. “Your argument is that it is the state’s will to give or not give fundamental rights.”
No new tax for agriculture, construction sectors: Dar assures NA ISLAMABAD
STAFF REPORT
Finance Minister Ishaq Dar on Friday assured the National Assembly that no new tax would be introduced for the agricultural and construction sectors as part of the nine-month Stand-by Arrangement (SBA) with the International Monetary Fund (IMF). Speaking on the National Assembly (NA) floor on Friday, the finance minister said that he had “promised in the budget that whatever agreement is reached with the IMF will be presented before the parliament”. Dar said three copies of documents signed with the IMF have been placed in the National Assembly’s library as he noted the “positive role” played by members of parliament in securing the SBA. Stressing the government’s commitment to transparency, Dar said that all documents have also been made available on the Finance Ministry’s website. “Due to non-implementation of the conditions (set with the IMF) on the part of the previous government, many difficulties were faced by this government,” he said. “When our government came, there were reserves of $14 billion dollars. we are committed to leaving the country’s reserves in a better state,” he added. “We hope that when the new government comes, this IMF program will be over.” The finance minister also said that no tax will be levied on the construction and agriculture sectors and that efforts were afoot to reduce inflation in the country. “The inflation rate can come down to as low as 7%,” the minister said as he presented the document of the IMF agreement noting that there are 11 or 12 reviews of the agreement. “We are trying our level best that a 9th review of the IMF agreement can be completed,” said Dar. Last month the government reached a staff-level pact with the IMF, a decision long awaited by the South Asian nation which is teetering on the brink of default. The deal had come after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves. Islamabad has taken a slew of policy measures since an IMF team arrived in Pakistan earlier this year, including a revised 2023-24 budget last week to meet the lender’s demands. Other adjustments demanded by the IMF before clinching the deal included reversing subsidies in power and export sectors, hikes in energy and fuel prices, jacking up the key policy rate to 22%, a market-based currency exchange rate and arranging for external financing. It also got Pakistan to raise over 385 billion rupees ($1.34 billion) in new taxation through a supplementary budget for the 2022-23 fiscal year and the revised budget for 2023-24. Going forward, the IMF said, the central bank should remain pro-active to reduce inflation and maintain a foreign exchange framework. The painful adjustments have already fuelled alltime high inflation of 38% year-on-year in May.
Govt ends gas subsidy scheme for export-oriented sectors g
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SNGPL DIRECTED TO RAISE INVOICES TO SECTORS AS PER PREVIOUSLY APPROVED MECHANISM BY CABINET PROFIT
AHMAD AHMADANI
The government has ended subsidies for gas supply to five export-oriented sectors, it emerged on Friday. The Petroleum Division’s Directorate General Gas has informed Sui Northern Gas Pipeline Limited’s (SNGPL) managing director that no subsidy has been allocated by the government for gas supply to five exportoriented sectors for the current fiscal year. Previously, SNGPL sought guidance from the Petroleum Division on the billing procedure for the five sectors during FY24. In response, the Division has now clarified that the approved mechanism — blending 50:50 of system gas and RLNG for nine
months and 100 percent RLNG for three months — should be implemented without any subsidy. The letter from the Petroleum Division, dated July 20, 2023, addressed to the SNGPL’s managing director, refers to the gas utility’s earlier letter — No. BD: 938 (RLNG) dated June 27, 2023 — which had requested the continuation of gas supply to five export-oriented sectors at a concessional rate in FY24. According to the Directorate General Gas, the government has not allocated any subsidy for the gas supply to these exportoriented sectors in the current financial year. As a result, SNGPL is directed to raise invoices to these sectors as per the previously approved mechanism by the cabinet.
Under the approved mechanism, the five export-oriented sectors will receive a blend of 50:50 system gas and Re-Gasified Liquefied Natural Gas (RLNG) for a period of nine months, spanning from March to November. During the remaining three months of the year, these sectors will be provided with 100 percent RLNG without any subsidy. The decision comes as the government continues to grapple with economic challenges and strives to manage the energy sector efficiently. It also comes as the government takes measures to implement the Standby Arrangement with the International Monetary Fund (IMF). Reports stated earlier that the government agreed to address the circular debt in the gas sec-
tor — which stood at Rs 577 billion — by hiking gas prices by up to 40 percent and ending subsidies. The State Bank of Pakistan (SBP) had also previously advised the government to end gas subsidies to prevent the circular debt, defined as a cash shortfall across the sector when the gas purchaser fails to pay the gas provider, from ballooning further. The five export-oriented sectors are likely to face increased operational costs due to the absence of subsidised gas supply. This decision may have implications for their competitiveness in the international market and might prompt them to explore other cost-saving measures. Sui Northern Gas Pipeline Limited, as the major gas distribution company in the
northern region of Pakistan, will be responsible for implementing the approved mechanism and ensuring an uninterrupted supply of gas to the five export-oriented sectors as per the directives of the Petroleum Division. As FY24 progresses, the government’s decision regarding the allocation of subsidies for various sectors will continue to shape economic activities and have an impact on businesses across the country. The Petroleum Division’s decision highlights the ongoing efforts of the government to streamline energy subsidies and ensure a sustainable energy sector in the face of fiscal challenges. The burden of increased costs for the export-oriented sectors now rests on their ability to adapt and navigate these changes effectively.