Bharat Rakshak

Peregrine - what exactly did you mean by the decimation of the Hindu & Sikh Intelligentsia? Care to explain? Thanks,

Vivek K wrote:Peregrine - what exactly did you mean by the decimation of the Hindu & Sikh Intelligentsia? Care to explain? Thanks,

Vivek Ji :

It was a reply to Garg Ji in respect of his statement about Pakistan still not very successful in managing the economy.

Are you not aware of the decimation of the Hindu & Sikh Intelligentsia as well as the Hindu & Sikh Trading Community in the Land of the Pure and the Home of the Terrorists? Decimation is not only by Slaughter but also by Eviction not only during Partition but is still going on with the Minuscule number of Hindus and Sikhs in the Land of the Pure and the Home of the Terrorists!

Cheers

GubonomicVasleenodickAnalysis
Phakistan’s Phoconomic flisk

Reserves have also depleted at an accelerated rate because the central bank has been intervening in the interbank market to shore up the value of the rupee. Running down foreign currency reserves to buy rupees contributed to reserves dwindling to an alarming level in early October — to just under $ 4 billion, and not enough to cover even a month’s imports. By the end of October however, reserves (held by the State Bank) had recovered to $ 4.2 billion.This still puts reserves in the range that precipitated the 2008 balance of payments crisis. The important difference is that there is now an IMF programme in place. But more repayments loom to the IMF (on the earlier loan) and other creditors. In November around $744 million is due to the IMF as well as an unspecified amount owed to others.An IMF mission was recently in Islamabad to conduct a quarterly review of progress as required under the Extended Fund Facility (EFF) arrangement agreed in August for a fresh three-year $ 6.6 billion loan. With this review now concluded, the IMF’s executive board is expected in mid-December to approve the next tranche of the loan — around $540 million.Herein lies the challenge for the country’s economic managers. With more outflows than inflows expected in the next few months, managing the reserve position acquires critical importance, especially to avert any precipitous erosion of market confidence. . The IMF may also have underestimated the balance of payments gap. This is why the government has asked the Fund for additional upfront money to help it tide over this fragile situation. But this still leaves the government with the daunting task of managing a tight reserve position in the next six months to meet liabilities and prevent panic in the market. This is especially so as funding committed by other multilateral institutions and bilateral partners, conditioned on the IMF deal, is not likely to kick in for another few months. The government therefore has to deftly negotiate this period and signal that it is proceeding according to a plan to address the balance of payments problem and build reserves.

Hereditory Begger & Bragger Bakistan: Question of Few Zeros in the End
Kafir Foreign exchange reserves hit 12-year low, SBPagal data

Foreign exchange reserves held by the State Bank of Pakistan (SBP) have declined to a 12-year low of $2.9 billion, hitting its lowest level since November 2001, according to data released yesterday.SBP’s foreign exchange reserves reduced $83.5 million, or 2.7%, between November 29 and December 6. Total liquid foreign reserves held by Pakistan on December 6 amounted a little over $8 billion, SBP data revealed. Out of the total liquid reserves, net foreign reserves held by the banks other than the SBP amounted more than $5 billion.Pakistan’s foreign exchange reserves have declined by $2.9 billion since the beginning of fiscal year 2013-14. Notably, the decrease in the total liquid reserves is mainly due to a sharp drop in the reserves held by the central bank.
“Pakistan’s current account deficit increased to $1.3 billion in July-October as opposed to the surplus of $14 million in the corresponding period of the last fiscal year.As a consequence, the rupee has undergone considerable depreciation due to declining reserves. It has depreciated by 7% since July 1 and was traded at Rs110.50 a dollar in the inter-bank market on September 26.
Meanwhile, according to economist Sayem Ali, the current level of foreign exchange reserves gives only three weeks of import cover. It reflects a highly vulnerable balance of payment position with a negative outlook for the Pakistan rupee.“Foreign reserves data shows the SBP’s short-term borrowing from commercial banks has spiked, which increases the roll-over risks in the foreign exchange market,” Ali said.“In the current fiscal year, the IMF will lend Pakistan $2.2 billion whereas Pakistan will repay it $3.2 billion.“Private capital inflows have posted a healthy increase on the booming stock market, but they remain insignificant to have a meaningful impact on the foreign exchange reserves position,” Ali added.

Pakistan's total debt up Rs1 trillion in first 3 months of fiscal year

ISLAMABAD : Pakistan’s foreign debt increased to Rs403 billion due to depreciation of the rupee since Pakistan Muslim League-Nawaz (PML-N) came to power, taking the total debt to approximately Rs15 trillion.

Cheers

Deleted

Despite all those western-metrics to measuring economic growth, here's some good news based on good ol' fashioned madrassa sim sala bim techniques. GDP growth has increased to 5.1pc, says Loin of pakjab.



Pakis! Rejoice! Your pie in the sky 5.1% is more than India's calibrated 4.8% in everyone's books.

Dent in revenues: Govt admits to revising tax target downwards-express tribune
Rs2.475 trillion tax target has been revised downward, which will have direct implications for the development budget that has also been sliced by one-fifth.
Due to lower tax collection in the last fiscal year, this year’s tax collection target has been revised to Rs2.345 trillion, Rs130 billion less than the target set by the Parliament.
Dar said this year’s budget had been prepared on the assumption that the Federal Board of Revenue would collect Rs2.05 trillion in tax revenue in fiscal year 2012-13. In the end, the FBR collected only Rs1.946 trillion that eroded the base, which was now affecting revenue collection in the current fiscal year, he added
Dar said so far the FBR had managed to attain a 17% growth rate in revenue collection over the previous year and expectations were that the rate will increase to the 20% necessary to achieve the revised target of Rs2.345 trillion, he added. (actually slightly more than 20, but lets see.)

The first report of the International Monetary Fund (IMF) that went public in September last year had showed that the FBR’s revenue collection target was Rs2.345 trillion. However, at that time the federal government dispelled it saying it was merely the IMF’s projection. (As usual trying to fool its awaam)
It was not yet clear whether the government will stick to the budget deficit ceiling of 5.8% of the GDP or try to relax it. Breaching the budget deficit ceiling may adversely affect the $6.7 billion IMF programme. (This is an imp. parameter to watch and may be fudged using madrassa maths)

US assistance
While responding to a question on reduction in United States (US) civilian assistance to Pakistan, Dar said Pakistan will review the situation. Dar said his government was more concerned about timely disbursements of the Coalition Support Fund (CSF) than receiving aid under Kerry Lugar Berman Act.
President Obama has sought approval for $1 billion from Congress for both civil and military assistance to Pakistan for the next fiscal year. This has given rise to speculations that the US administration has cut the annual $1.5 billion civilian assistance programme.
Pakistan has sent CSF bills from October to December 2013 to the US and total outstanding dues on account of CSF have increased to $1.6 billion, said Dar, while urging the US to disburse the money timely so that Islamabad could cushion its depleting foreign currency reserves.
Eurobond
Dar confirmed reports that Pakistan will float $500 million worth of Euro Bonds early next month. He said the transaction will be completed by the mid of next month and hoped that the bond will get affirmative response from the international investors.
Dar said Pakistan’s economy was moving in the right direction and the country will achieve an economic growth rate of 4.4% as against the IMF projection of 3.1%.

Pakistan has become a neo-colony in the words oh Nkrumah.

Mangla, Tarbela to hit dead level on 18th

Economic Relief is on The Way ....Soon

LAHORE - Pakistan will face trickle down effect for not constructing water reservoirs including the Kala Bagh Dam as the water storage in Mangla and Tarbela will end on 18th of this month, TheNation has learnt.If more water reservoirs were not constructed in near future, the water and food experts warn, Pakistan may face the fate of Ethiopia and other such famine-hit African countries.Sources in the Irrigation Department disclosed that the Indus River System Authority (IRSA) from Ist January 2014 onwards to March 10 faced 21pc low flow in the rivers that not only halted the storage as well as the power generation on the dams. As per details, the flow in Indus River 13pc less, in Kabul River 18pc less, Chenab River 8pc and Jhelum 7pc. It was also told that the IRSA estimated 7pc less flow in the rivers from October to March for the Rabi season. Last year on 10th March, the dams had 1.485 MAF storage but this year it reduced to 0.718 MAF, which the experts say was much alarming. The dream of filling total water storage capacity of all the three major reservoirs including Mangla, Tarbela and Chashma that is 14.262 MAF will never be materialised given the current flow in the rivers. The total demand of irrigated water for all the provinces in 2013-14 was estimated as 37 MAF.
If the country faces less rain fall, the situation may worsen in the coming months that would badly affect the sowing of kharif crop, the water experts warn. The shortage will be on the peak when sowing the kharif crop starts in April; they said and added that the system faces severe shortage of 15pc for the Rabi season.All the provinces got less shares in water distribution. As per data Punjab got 16.28 MAF against 18.78 MAF, Sindh 12.5 MAF against 14 MAF.As per the 1991 water distribution pact among the provinces, the share of Punjab for Rabi season is 18.78 MAF, share of Sindh 14 MAF, KPK 0.8 MAF and that of Balochistan is 1.03 MAF. As per reports, the water surface of Tarbela is 22 feet but that of Mangla is 42 feet up than the dead level. The water entering at Tarbela was recorded as 10500 cusecs and spill was 45000 cusecs and the water level in the dam was 1401.50 feet against the dead level of 1378 feet of the dam and it contains 0.293 MAF. On the other hand, at Mangla, arrival of water was recorded as 15400 and fall was 32000 cusecs. The water level at the dam was 1083.60 feet and storage is 0.406 MAF but its dead level is 1040 feet. The water flow in Chenab at Marala was recorded 9500 cusecs and in Kabul River the flow at Noshera was 6200 cusecs.When contacted Irrigation Department consultant Mehmoodul Hasan Siddiqui confirmed that the system might witness 15pc water shortage for irrigation purposes. He said that the dams would be empty if there were no rain falls. He said that the country would face severe shortage of water for irrigation as well as power production at dams. He said as the country’s high birth rate is producing additional millions Rat people each year and the current situation would further place further strain on a population already vulnerable to water insecurity. The only solution of the current precarious situation was construction of new reservoirs.

Artificial, Pretend H&D:Bhookha , Baighairat Begger Bretending Badshahi Bragging

Boosting forex reserves: Pakistan refuses to sell $2.7b worth of gold says IMF
( Reserves in Gold are War Booty Reserved meant for Taliban)

MALSIAMABAD: Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund (IMF) pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, revealed the global lender’s report on Friday.According to the report, the State Bank of Pakistan (SBP) holds over 2 million troy ounces of monetary gold, having $2.7 billion value at market rate. It is not counted in gross international reserves as it is not deemed to be liquid by the SBP, says the IMF.The IMF and Pakistan authorities discussed what steps would be needed to make gold more liquid, the report adds. “However, the (Pakistani) authorities stressed that they have no plans to sell gold and preferred existing arrangements for gold holdings for national security reasons.”The IMF is pushing Pakistan to sell gold holdings at a time when other countries are buying the commodity as a strategic reserve. The IMF had even sold its surplus gold to India a couple of years ago.According to analysts, one reason behind the IMF’s insistence could be the country’s inability to build official foreign currency reserves despite being in the $6.7 billion IMF arrangement.While the IMF hinted in its report that the SBP was not aggressive in building foreign currency reserves, it disclosed that Pakistan’s central bank continued its efforts to build reserves by purchasing dollars from the market.While the federal government remains reluctant to officially disclose the name of the country that ‘gifted’ Pakistan $1.5 billion despite persistent demand of the opposition, the IMF report identifies it as Saudi Arabia.A “$750 million grant recently received from Saudi Arabia” will help the Pakistan government in reducing borrowings from the SBP for budget financing, said the IMF.In a footnote to the MEFP, Pakistan told the IMF that it received an initial inflow of $750 million on February 19, indicating that it would receive more money.For the 2014-15 fiscal year, the IMF expected Pakistan’s growth to accelerate to around 3.7 per cent.The IMF report said the growth was boosted by a stronger manufacturing industry thanks to an easing of Pakistan’s chronic electricity shortages, despite weaknesses in agriculture.

http://tribune.com.pk/story/798508/fina ... cs-of-pso/

Every few days, employees managing the finances of Pakistan State Oil (PSO) meet in a secret huddle and there, they conspire — which bank should be last to get loan repayment? Who has the capacity to exert pressure on Islamabad? How about a threat to cut fuel supply to Pakistan International Airlines? Will this work for PSO to receive withheld funds?
For a company with sales revenue of Rs1.4 trillion, equivalent to 33% of the government’s budget outlay, PSO is a behemoth with an empty stomach. Responsible for 60% of country’s oil need, it often doesn’t have cash to pay off suppliers.
“We have already defaulted to a couple of suppliers and banks in the last few months. The fear of the worse keeps looming over us,” said a senior official.
“Often we have to use the tactic of holding payment to a foreign bank, which in turn compels the government to release funds. This is not good for our reputation but what else can we do?”

PSO’s receivables, mostly due from power producers, exceed Rs220 billion. Three governments have not been able to solve the problem, which arises from consumers not paying their power bills, exacerbated by electricity theft, excess use of furnace oil, subsidies and ends with a black hole in the national exchequer.
Amid all this, PSO has a lifeline in shape of a long-term supply contract with the Kuwait Petroleum Corporation (KPC), which sells diesel to Pakistan on very lucrative credit terms.
PSO buys around 2.5 million tons, or 70% of its diesel sales, from KPC. It doesn’t even use letter of credits for it. Under a long-term agreement, import payments are made 60 days after the shipments are booked.
“For the October-December 2014 quarter, they have even extended that duration to 90 days. So, basically, we get a loan of millions of dollars for two to three months,” he said.
Now the Ministry of Petroleum has asked PSO to limit imports from KPC between 2 million and 2.4 million tons. The move comes following protracted efforts of Byco, which has the largest refining capacity of 155,000 barrels per day in Pakistan.
Byco believes that local refineries should not be ignored. “What is the point in importing so much when local refineries have the capacity to meet the demand?” Byco Chairman Amir Abbassciy said in an interview last week.
The matter has further soured an already bitter relationship between the two. Byco supplies petroleum products on a credit of 21 days but PSO doesn’t want to meet this condition.
Bank guarantee or any other financial instrument in favour of Byco is also out of the question, considering PSO’s already leveraged position. Again there is an impasse.
A PSO spokesperson said that no formal agreement had been signed with Byco.
The location of the refinery in Hub is an issue too. Diesel produced by the refinery has to be transported 100 kilometres to Port Qasim from where it can be pumped to Punjab via a cross-country pipeline. In Karachi, dozens of tankers will crisscross rickety roads. It’s a logistical nightmare. And who will bear the cost?
To an outsider, every act of PSO appears shady. Everyday business decisions are taken with a tinge of conspiracy. But beneath few layers of whatever is mentioned in news and industry grapevine, there is basic human nature at work.
Years of out-of-turn promotions, FIA inquiries, interference of ministers and secretaries, suspensions and political pressures have made a certain cadre in PSO hardened. They have learnt to fight back outsiders who try to squeeze the company and its employees.
“We have nothing against any company including Byco. This is not about ego or anything. But Mr Abbassciy must realise that coming from the top is not how business is done. Byco has to deal with PSO. They should come and settle the matter once and for all,” said senior PSO official.
This relates to an arrangement Byco has planned for quite some time. If it could charter a tanker, which can transport diesel from refinery’s jetty in Hub to Port Qasim, the problem will be solved.
People in PSO want Byco to become a consistent long-term supplier who could become part of the marketing giant’s fuel supply schedule.
At the same time, the pressure, which the PSO executives work with, is all the more apparent in case of LNG. Government is using PSO to import up to 400 million cubic feet per day of gas.
That’s a proposition, which will bloat company’s debt by twice its current level. Many of the senior PSO officials have already raised their hands. No one wants to do anything with it.
Just like furnace oil, LNG will enter an energy infrastructure replete with leakages. Gas will go to same power plants, which are withholding payments to PSO because they don’t get their money from Water and Power Development Authority.
Industry people say that there is no denying the pressing need for LNG import. But even the PSO wizards can’t bear to imagine consequences of a default in this case. And they are running short on tricks.

The above report is saying they have already defaulted on a few banks.
I believe that is the next step in the fall.
PS I could not find the post which showed the different steps in the financial breakdown. Kindly repost that post

Jhujar wrote:Hereditory Begger & Bragger Bakistan: Question of Few Zeros in the End
Kafir Foreign exchange reserves hit 12-year low, SBPagal data

Foreign exchange reserves held by the State Bank of Pakistan (SBP) have declined to a 12-year low of $2.9 billion, hitting its lowest level since November 2001, according to data released yesterday.SBP’s foreign exchange reserves reduced $83.5 million, or 2.7%, between November 29 and December 6. Total liquid foreign reserves held by Pakistan on December 6 amounted a little over $8 billion, SBP data revealed. Out of the total liquid reserves, net foreign reserves held by the banks other than the SBP amounted more than $5 billion.Pakistan’s foreign exchange reserves have declined by $2.9 billion since the beginning of fiscal year 2013-14. Notably, the decrease in the total liquid reserves is mainly due to a sharp drop in the reserves held by the central bank.
“Pakistan’s current account deficit increased to $1.3 billion in July-October as opposed to the surplus of $14 million in the corresponding period of the last fiscal year.As a consequence, the rupee has undergone considerable depreciation due to declining reserves. It has depreciated by 7% since July 1 and was traded at Rs110.50 a dollar in the inter-bank market on September 26.
Meanwhile, according to economist Sayem Ali, the current level of foreign exchange reserves gives only three weeks of import cover. It reflects a highly vulnerable balance of payment position with a negative outlook for the Pakistan rupee.“Foreign reserves data shows the SBP’s short-term borrowing from commercial banks has spiked, which increases the roll-over risks in the foreign exchange market,” Ali said.“In the current fiscal year, the IMF will lend Pakistan $2.2 billion whereas Pakistan will repay it $3.2 billion.“Private capital inflows have posted a healthy increase on the booming stock market, but they remain insignificant to have a meaningful impact on the foreign exchange reserves position,” Ali added.

When Oil prices go down Saudi Largesse hidden as NRP remittences goes down, the truth be told if the 3.5 turn off the tap, Paki economy will collapse within 1 year, but for H&D purposes Pakis disguise as if they earned it.

P.S- Look at the prices Pakis pay for American weapons, they are at Isreali prices, with the American taxpayer unofficially paying uncle sam's companies through a black budget somewhere else.

The above data is misleading.
1 IMF is not going to pay the pakis.
2 The reserves cannot cover 3 weeks. It is working now because the Kuwaiti deal for oil is on, which does not use letters of credit. That is going to end in December. So come December the reserve will not cover a single week. Also no more coalition support funds.
So 2.9billion $- 3.2 billion $ = -0.3 billion $ atleast.
The default is very close.

The report is a year old, unfortunately. Paki reserves stand at $14 Billion now.

^^^^
$3 -> $8
or
$8 -> $13

either add private banks or leave out in both. 3 or 8 makes no difference. And it might get to 10, not going to 14 even if oil goes to 20 for another year.

Oops didn't see the date. But shreeman is right, there is a whole lot of sialkot statistics going on to get the IMF loan, the zerg a azzb is also one of the things required for the next back shish of dollars. The suck cook money is probably made up.
Forex reserves to cross $14bn after IMF disbursement of $1.1bn this month
Pakistan is set to cross the $15bln reserves barrier, thus becoming eligible to benefit from the concessionary development lending window of the World Bank - International Bank for Reconstruction and Development.

Also see

http://www.thenews.com.pk/Todays-News-1 ... ng-$1.1-bn
So both IMF and other lenders want higher forex reserve and voila you have higher reserve even without selling gold. So most of this is made up reserve. In reality, if they don't get this funds, then they will face balance of payment problem.
With dimran's plan choo coming into play, its popcorn time.

The saga continues
http://tribune.com.pk/story/799427/reve ... er-growth/
The tax authorities have apparently lowered the actual tax collection of November last year by roughly Rs20 billion to Rs151.7 billion aimed at inflating the growth in the current month by at least 13%, showed the collection figures reported by FBR and State Bank of Pakistan.
The FBR’s provisional results showed that it collected Rs175 billion in taxes in November this year, attaining a growth rate of 15.3% over November last year.
Had the FBR taken the actual revenue collection of Rs171.2 billion as reported by the SBP for November last year, the growth in this November would have been just 2.4%, which is even worse than the performance of the PPP government.
It is not for the first time the government has toyed with previous year’s statistics to claim good performance.

OK the barrier has been breached
PSO unable to pay: Banks block Rs93b worth of LCs for oil import-Express tribune
ISLAMABAD: A breakdown in the oil supply chain is feared across the country as oil imports may come to a halt after international banks blocked Rs93 billion worth of letters of credit (LCs) of Pakistan State Oil (PSO) due to default on payments.
In a letter to the federal government, PSO, the oil marketing giant, said the company had exhausted its borrowing limit, defaulted on payment of Rs46 billion against LCs and consequently Rs93 billion worth of LCs had been blocked.
It pointed out that the company had been supplying fuel oil to power producers on a special credit facility on the instructions of the government to reduce electricity outages in the national interest. “This has resulted in accumulated receivables of Rs197 billion from these entities,” it said.
“The banks concerned have made it clear that in case of continuous default, they will have to review their relationship with PSO and block the funded and non-funded limits extended to the company until the resolution of the issue.”
In view of this situation, the company said its institutional reputation and business relationship with the suppliers and banks had been adversely affected and further failure on its part to honour payment obligations could be seriously detrimental for the company and the country.
PSO feared that besides the disruption in the company’s supply chain due to default, the delay in receipts from the power sector could have very serious financial, regulatory and political implications and a considerable time would be required to put the supply chain back on track and restore the confidence of suppliers.
“As you are aware, we continue to make serious efforts for the recoveries by taking up these issues regularly with the customers and government offices,” the company said.
Considering the gravity of the situation and the government’s instructions to continue supplies on credit, PSO sought immediate intervention of the Ministry of Petroleum and Natural Resources to resolve the issue and get the receivables settled.
It stressed that some actions may be taken to enable the company to deal with the situation in order to avoid breakdown of the supply chain.
It called for the immediate release of Rs46 billion to retire the LCs and a further Rs28 billion to honour upcoming international and local payment obligations by the end of December.


This is the next step in the spiral. The small default can be followed by big default. Anyways the "Defaulter" tag has been gained by PSO, which will make future transactions dependent on cash (Foreign exchange) instead of Letters of credit. Given the limited amount of foreign exchange with beggaristan, this will get progressively difficult. The current FE stocks are said to be 14 billion dollahs, while around .75 billion dollahs are needed for just to retire debt by end December.

^^ Pakistani govt. is doing `chalta hai` with regard to international commitments and trade. There was another news article saying that they have defaulted.That was on dec 21.

Yes rsoamiji that was on 21st and this is the next step, international banks have blocked the other letters of credit till the previous payment is cleared. Moreover the international banks now will not prefer letters of credit in dealing with PSO as well as beggaristan.
Popcorn time has started.
The irony is that they are defaulting at a time when oil is at a low price. And on the other hand they are claiming that the FE reserve is high.
I have a feeling that the suck cook bonds were sialkot statistics and the cook didn't give them anything. After all who visits Pakistan and physically verifies the foreign exchange stocks claimed.

PSO default - interesting - this article is from November:
http://tribune.com.pk/story/798508/fina ... cs-of-pso/

KARACHI:

Every few days, employees managing the finances of Pakistan State Oil (PSO) meet in a secret huddle and there, they conspire — which bank should be last to get loan repayment? Who has the capacity to exert pressure on Islamabad? How about a threat to cut fuel supply to Pakistan International Airlines? Will this work for PSO to receive withheld funds?

For a company with sales revenue of Rs1.4 trillion, equivalent to 33% of the government’s budget outlay, PSO is a behemoth with an empty stomach. Responsible for 60% of country’s oil need, it often doesn’t have cash to pay off suppliers.

“We have already defaulted to a couple of suppliers and banks in the last few months. The fear of the worse keeps looming over us,” said a senior official.

“Often we have to use the tactic of holding payment to a foreign bank, which in turn compels the government to release funds. This is not good for our reputation but what else can we do?”

PSO’s receivables, mostly due from power producers, exceed Rs220 billion. Three governments have not been able to solve the problem, which arises from consumers not paying their power bills, exacerbated by electricity theft, excess use of furnace oil, subsidies and ends with a black hole in the national exchequer.

Amid all this, PSO has a lifeline in shape of a long-term supply contract with the Kuwait Petroleum Corporation (KPC), which sells diesel to Pakistan on very lucrative credit terms.

PSO buys around 2.5 million tons, or 70% of its diesel sales, from KPC. It doesn’t even use letter of credits for it. Under a long-term agreement, import payments are made 60 days after the shipments are booked.

“For the October-December 2014 quarter, they have even extended that duration to 90 days. So, basically, we get a loan of millions of dollars for two to three months,” he said.

Now the Ministry of Petroleum has asked PSO to limit imports from KPC between 2 million and 2.4 million tons. The move comes following protracted efforts of Byco, which has the largest refining capacity of 155,000 barrels per day in Pakistan.

Byco believes that local refineries should not be ignored. “What is the point in importing so much when local refineries have the capacity to meet the demand?” Byco Chairman Amir Abbassciy said in an interview last week.

The matter has further soured an already bitter relationship between the two. Byco supplies petroleum products on a credit of 21 days but PSO doesn’t want to meet this condition.

Bank guarantee or any other financial instrument in favour of Byco is also out of the question, considering PSO’s already leveraged position. Again there is an impasse.

A PSO spokesperson said that no formal agreement had been signed with Byco.

The location of the refinery in Hub is an issue too. Diesel produced by the refinery has to be transported 100 kilometres to Port Qasim from where it can be pumped to Punjab via a cross-country pipeline. In Karachi, dozens of tankers will crisscross rickety roads. It’s a logistical nightmare. And who will bear the cost?

At the same time, the pressure, which the PSO executives work with, is all the more apparent in case of LNG. Government is using PSO to import up to 400 million cubic feet per day of gas.

That’s a proposition, which will bloat company’s debt by twice its current level. Many of the senior PSO officials have already raised their hands. No one wants to do anything with it.

Just like furnace oil, LNG will enter an energy infrastructure replete with leakages. Gas will go to same power plants, which are withholding payments to PSO because they don’t get their money from Water and Power Development Authority.

Industry people say that there is no denying the pressing need for LNG import. But even the PSO wizards can’t bear to imagine consequences of a default in this case. And they are running short on tricks.

a guptaji already posted by me

http://www.brecorder.com/supplements/88/1257537/
PSO, (in giant trouble), is a giant.

Sorry, K Mehta, missed your post!

Dunno how to interpret this following:
http://www.hellenicshippingnews.com/pak ... irst-time/

Pakistan State Oil (PSO) is skipping January imports of high sulphur fuel oil for the first time and is reducing its overall fuel oil imports in February to March by about 80 percent from a year earlier, sources with direct knowledge of the matter said.

State-owned PSO will import 120,000 tonnes of low sulphur fuel oil in February through March, compared with a total of 715,000 tonnes of both high and low sulphur grades in the same period in 2014, the sources said on Wednesday.

“High sulphur fuel oil is their big demand. They should have tendered for Q1 but didn’t – only LSFO,” said a Singapore-based fuel oil trader.

Fuel traders said the reduced demand for fuel oil came even as the country faced regular blackouts.

PSO has also sought to defer the December arrival of high sulphur fuel cargoes until next month, traders said.

“The current tender expiring in December is deferred to January,” said one of the fuel sellers that sold into the tender for 1.275 million tonnes of fuel oil.

PSO could not be immediately reached for comment.

The company sought via a tender a total of 4.48 million tonnes of fuel oil this year, or a monthly average of 370,000 tonnes.

That is huge, I think this is a buildup to a coup, already less production plus reduction due to debts and now this
Burdening but no power consumers to pay 1.2billion rupees
The consumers of electricity will be forced to pay an extra Rs1.2 billion in capacity charges to a power plant without receiving any supplies as gas will be diverted from the plant to textile manufacturers, says a summary submitted to the economic decision-makers.
The proposal was prepared and floated by the Ministry of Water and Power, which had been advocating provision of gas to power plants, in a meeting of the Economic Coordination Committee (ECC) on December 24, sources said.
It suggested diverting gas from Rousch Power Plant to the textile industry for two months, but acknowledged that the step would lead to an increase in power outages in the country.
Estimates show the consumers will be paying Rs600 million per month in capacity charges to the power plant without getting 412 megawatts of electricity in the wake of diversion of gas to the textile manufacturers.
However, it was highlighted in the meeting that stopping the supply of gas would bring down the production of cheaper electricity by about 400 megawatts at a time when annual maintenance of canals would restrict hydroelectric power generation to low levels. This would result in an increase in load-shedding.
Setting the concerns aside and like the previous arrangement cleared by the ECC, it was proposed that 85 mmcfd of gas could be diverted for a period of 60 days from Rousch to the industrial sector. For paying capacity charges, a memorandum of understanding (MoU) would be executed.
After discussions, the ECC endorsed the proposal, burdening power consumers with more than a billion rupees and prolonging outages to please the powerful textile lobby.

There will be a domino effect. In absence of fuel oil, and low available hydel energy, the load will be on CNG based producers, this will in turn affect the CNG based vehicles and households.
Expect very high load shedding and disruption of CNG supplies to pumps and households. For households it would be a double whammy, no electricity and gas to keep warm.
Let's see how diesel and petrol prices especially black market price fares, as the defaulter status will affect the purchase of all hydrocarbon fuels.

http://tribune.com.pk/story/816341/pso- ... producers/
PSO warns of no supplies for power producers

ISLAMABAD: Sending warning signals, state-run oil marketing company Pakistan State Oil (PSO), shaken by a cash strain and default on payments to international banks and oil suppliers, has said it will be forced to halt business with power producers if the overdue amount is not released.

In a letter to the Ministry of Petroleum and Natural Resources on December 30, PSO pointed out that billions of rupees owed by the power producers and their potentially damaging impact were affecting viability of the company’s business.

In view of these receivables which stood at Rs198 billion, PSO said it had borne penalties of approximately Rs250 million for delay in payments to banks from October to December 2014.

It also paid $1.8 million in demurrages from July to November last year and settled damages claims of about $6.4 million of the suppliers because of delay in offloading cargo from vessels and in opening letters of credit (LCs).

In this situation, PSO was unable to open new LCs as the company’s credit limits had already been exhausted and LC lines of Rs110 billon were blocked. “We are left with no choice but to freeze business ties with the power sector once current supplies are exhausted.”

Though the company had placed tenders with the Kuwait Petroleum Company for the supply of light sulphur fuel oil (LSFO), but they were not followed up as LCs could not be opened.

“Once the promised Rs10 billion is released, we would be able to import relevant cargoes,” the company said, adding considering the quantity currently available and the 20-day time required to bring further cargoes, Kot Addu Power Company (Kapco) would likely face a halt to oil supplies.

Further:
http://www.brecorder.com/fuel-a-energy/193/1139336/

It further stated, "We would emphasise that we can only recommend business once our receivables are cleared or at the very least all our liabilities (for demurrage, penalties to banks and suppliers) wiped out. We would also highlight that the lack of financing (due to the power sector receivables) will also have an impact on white oil supplies as our inability to effect further borrowings or avail of LC facilities until retirement of the existing LCs will extend to all future imports and including white oil imports. It is not possible to selectively honour only those LCs that relate to the import of white oil as any such practice would not be acceptable to the lending/LC opening banks, may attract the cross default clauses of our financing agreements, is not in line with prevailing practices and could lead to further restrictions on PSO's financing lines as well as reputational issues with suppliers and others.

As you will appreciate, PSO in accordance with GOP instructions and in the national interest, and to fulfil the requirements of its customers, has been continually endeavouring to set the fuel requirements of the power sector. However, in view of the situation described above, it cannot continue to do so and will have to stop further supplies of furnace oil to the power sector unless its above liabilities are discharged and its dues are cleared.

Going forward, it is imperative to strike a balance between payments and supplies to enable smooth fuel supply operations and to prevent such a grave situation arising in future. As another measure to ensure such a situation does not arise in future, we would request that from now on PSO be allowed to deal with the private power sector in accordance with our contracts with them.

Life in Karachi (youtube):
https://www.youtube.com/watch?v=YYWcH59Nqaw

A bit old, but still significant because the circular debt problem doesn't go away (currently at 2% of Pakistan's GDP): Circular Debt Report:
http://www.pdip.pk/circular-debt-report/

How can the debt be circular when it is owed to external oil suppliers?
I have a theory that the baki government wants to get as much foreign loan as possible, part of this can be achieved by high FE reserve maintained artificially. If they pay the "circular" debt then the reserves will plummet by atleast 4-5 billion dollars, with a b.
See money from IMF made them eligible for world Bank money which now combined has made them eligible for IBRD. If the reserve falls then they cannot get the money. So they are hoarding all the FE. Let's see for how long.

BakiStan oil to get over in a week, blackouts ahead

Pakistani power consumers, who have gone through massive blackouts for years, will not be able to enjoy the benefit of low oil prices because of myopic government policies.
Instead of building a stock of furnace oil, which helps run over half the thermal power plants, the country has just enough to meet the requirement for the next seven days. After that, a blackout is expected in major cities of Punjab, officials said.
Pakistan State Oil (PSO) has cancelled all cargo shipments for January 2015 because banks have refused to renew its credit limits following continuous defaults, officials said.
Despite the red flags raised in the capital, PSO still sits over bank defaults of Rs40 billion. “Banks like MCB, Standard Chartered, and Citibank have refused to do business with us,” the official said.
The lowest point came on December 31 when the National Bank of Pakistan ceased PSO’s account. It was only after much lobbying and stress on common state-owned-roots that PSO was allowed to restart withdrawals.
Pakistan consumes approximately 900,000 tons of fuel oil every month, out of which around 700,000 is imported – almost all of it for the power plants.
This oil is supplied to state-run power generators and private Independent Power Producers.
Since power companies sell electricity to state-run distribution firms, they do not pay PSO until they get their money.
Power distribution system is laden with line losses, theft and subsidy, forcing government to step in every few months to rescue the energy supply chain. But PSO takes the heaviest beating when it comes to loss of reputation and money.
“Our suppliers are now demanding compensation. They arranged consignments, which we never received and paid for. Now, the price has gone down and they want to grab us by the neck,” said a company official
Even if somehow the government clears the dues and injects cash into PSO, the company will still be importing fuel oil booked in the last quarter of 2014, and would not be able to fully realise lower price benefits.
“I don’t know what we are going to do when the stock runs out,” said the official. “Blackouts are anticipated in Punjab but the fallout will reach Karachi in few days.”

^^^ related news:
http://www.hellenicshippingnews.com/fob ... ak-demand/

Do not worry. They may have no electricity. It is not important. There was no electricity when Bakistani ruled over India far 10000 years. Rest assured even in candle light they are planning stratigies of snatching kashmir,hydrabad,lal qila and taj mahal fram evel Yendia.

Trade map: Why are Pakistan’s exports declining?

CHICAGO: It was not supposed to have been this way. After the European Union granted GSP Plus Status to Pakistan, our exports were supposed to have risen sharply, yet instead, Pakistan’s sale of goods to the outside world have gone down by 4.3% during the first half of fiscal 2015. What is happening? What is causing this decline in exports?

There are three possible explanations for the slowdown in exports. The first is that Pakistan’s major export markets – the United States, the European Union, China and the Middle East – are experiencing an economic slowdown. The second is that the energy crisis is causing exporters to struggle to meet the demand from importers. And the third possible explanation is idiosyncratic factors that are not connected to systemic issues.

Cheers

It has begun
Severe petrol, furnace oil shortage hits country
ISLAMABAD: In the wake of worst shortage of petrol and furnace oil, the federal government has kept mum on the issue while Pakistan State Oil (PSO) is unable to replenish its stocks due to its exhausted funds.

The people are facing immense hardships due to scarcity of petrol at the stations as motorists are finding it hard to operate. With CNG already closed for four months in Punjab, the petrol shortage has proved last nail in the coffin making it extremely difficult for the motorists to move around without a lot of hazard. Also, no gas to meet even domestic needs coupled with 12 to 18 hours power load shedding amid chilling weather has added insult to the injury. The worst petrol shortage hit the country without any prior announcement that deprived majority of the motorists to get the fuel beforehand in order to keep their cars and motorbikes moving.

Sources in oil sector told Daily Times that Oil and Gas Regulatory Authority (OGRA) has decided to issue show cause notices to the Oil Marketing Companies (OMCs), owing to shortage of petrol at the filling stations in major parts of the country. However, Prime Minister, Power, Petroleum and Finance Ministers have so far kept mum on the acute shortage of both the fuels in the country, they added. “Due to lack of attention of the premier, finance, power and petroleum ministers, PSO has been facing financial constraints while innocent masses are forced to bear the brunt of shortage of petrol at the petrol pumps of the country, “an official at finance minister said on the condition of anonymity.

The sources also said that though PSO had made some contracts of Rs110billion to buy petrol and furnace oil in the international oil market, yet all contacts has been cancelled mainly because it could not receive Rs180billions from the power sector. Even, stock of furnace oil has dried due to financial crisis being faced by state-owned oil giant (PSO). Sources in power sector told that PSO has closed supply of furnace oil to Independent Power Producers (IPPs) and govt-owned power plants and due to this power shortfall has surged to above 5,600mw of power in the country.

Officials at petroleum ministry said that monthly petrol consumption has grown to three lakh tons mainly because of closure of Compressed Natural Gas (CNG) stations. They said to meet the pubic needs PSO has been importing two lakh and twenty thousands tons of petrol, while country’s refineries are supplying 80,000 tons of petrol in the open market. In a letter to the Ministry of Water and Power secretary, MD PSO asked to immediately provide Rs48billion to make an end to the petrol crisis. Managing Director PSO also said that PSO’s power sector receivables stood at Rs 198 billion, while it (PSO) incurred penalties of approximately Rs 250million (for the period from October 2014 to December 2014) on account of delayed payments of Rs 50billion to banks, $1.8million as demurrages (from July 2014 to November 2014) and supplies’ claims of about $6.4million for damages due to delay in nomination of vessel and in opening of LCs.

“However, in view of the situation described above, it can not continue to do so and will have to stop further supplies of furnace oil to the power sector unless its above liabilities are discharged and its dues are cleared,” the letter said. The managing director also said,” In view of the above situation PSO is not able to open further LCs as its credit limits stands exhausted and LC lines of Rs 110 billion are blocked. PSO is therefore left with no option but to freeze its business with power sector once current supplies have been exhausted.” So far, Rs 110 billion worth letters of credit (LCs) have been blocked and to some extent banks have refused to offer loan to PSO.

Taking notice of shortage of petrol at the filling stations, OGRA chairman Saeed Ahmad Khan has sought record of stocks of all OMCs. Under OGRA licenese rules, OMCs are bound to maintain petrol stock fore the needs of 20 days. And, in case otherwise there is a violation of the OGRA rules. Sources in OGRA told that regulator (OGRA) has decided to issue show cause notice to the OMCs due to shortage of petrol while imposition of heavy penalties on the OMCs was also likely in near future.

80 percent of filling stations in city closed due to cut in supply
LAHORE: Transporters and commuters suffered as a result of a drastic slash in the supply of petrol to the provincial capital city, as 80 per cent of filling stations in Lahore closed down Thursday.

A representative of the associations of petroleum dealers told a private news channel that the remaining pumps, which were open, would also be shut down if the supply of petrol was not restored.

Over the last two days, the administration has failed to sort out the fuel shortage as various areas of Lahore are facing petrol cut-off.

According to sources, the problem worsened due to the reduced oil imports whereas fog has also increased the fuel crisis as vehicles carrying fuel have to face difficulty in petrol transportation to pumps at night. Lahore’s daily consumption of petrol is 2.5 million litres whereas the current supply to the city stands at 400,000 litres. There are a total of 280 filling stations operating in Lahore. At least 119 of the filling stations are owned by the state-owned oil company PSO while the rest are privately owned. Transporters and commuters were the worst to suffer as long queues were seen at the filling stations which managed to remain open. Commuters complained that due to fuel shortage the transporters had tripled the fare, causing hardships to them.

90% in pindi
Through your esteemed newspaper, I want to draw the attention of the authorities concerned to the shortage of petrol. A severe crisis of petrol shortage has hit Punjab province while the Pakistan Muslim League-Nawaz government has failed to ensure smooth supply at filling stations. If the petrol crisis deepens, how will people ply their vehicles when Compressed Natural Gas (CNG) is also not there. In Rawalpindi, almost 90 percent petrol pumps are closed and people are pushing their cars from one place to another. LARAIB HAMEED Rawalpindi

Petrol shortage in Punjab irks motorists, passenger
ISLAMABAD/LAHORE - Over the last two days, motorists and passengers are facing problems due to shortage of petrol across Punjab at the gas stations forcing them to stand in long queues, repeating the scenes of rush at CNG stations.

The authorities of PSO and Ministry of Petroleum and Natural Resources have failed to sort out the fuel shortage and no explanation is coming from them. According to sources, the problem worsened due to the reduced oil imports, whereas fog has also increased the fuel crisis as vehicles carrying fuel have to face difficulty in petrol transportation to pumps at night. Most of the petrol pumps are closed and those opened have long queues of cars and motorcycles. This situation has disrupted the routine life of citizens.

As per sources, a ship carrying imported fuel will dock the port today after which the fuel supply is likely to be improved. In Rawalpindi and Islamabad the situation is more worrisome.

On the edge: Furnace oil stock used up, massive blackout feared
ISLAMABAD:
The country is on the verge of a massive power crisis as the stock of furnace oil for power generation has been exhausted due to Pakistan State Oil’s (PSO) inability to replenish it through imports due to lack of funds.
Sources close to the director general of oil in the Ministry of Petroleum and Natural Resources told The Express Tribune that PSO’s stock of furnace oil has been fully used up and there is no supply for power plants for electricity generation.
“Owing to the issue of circular debt, power plants have maintained only two to three days of oil reserves, but now these have been completely consumed,” a source said, adding that the country was now utilising the stock of diesel to partially run power plants.
Despite PSO’s constant warnings, the federal government has failed to take measures to release funds through either the finance ministry or the power sector.
Sources added that the petrol and diesel reserves were also not satisfactory for PSO, which is taking the products from Shell.
Petroleum ministry officials said that PSO had requested for the release of Rs46 billion to restore the Letters of Credit (LC) which were blocked but the finance ministry released only Rs10 billion.
“The finance ministry is now expected to release Rs15 billion to bail out the company which has inflated receivables of over Rs200 billion,” said an official, adding that PSO would be required to streamline the furnace oil supply for at least 20 days if it receives the money.
In a letter sent to the petroleum ministry on December 30, 2014, PSO said that power sector receivables and their potentially adverse effects are causing a negative impact on the entity’s business viability.
In view of these receivables standing at Rs198 billion, PSO authorities added, they had also incurred penalties of approximately Rs250 million on account of delayed payments to banks for the October to December 2014 period.
Cash cycle suffering
The company also paid $1.8 million in demurrages from July to November 2014 and the supplier claims of $6.4 million due to delay in use of vessels and in opening of LCs respectively.
In view of the above situation, officials said that PSO was not able to open further LCs as the credit limit stands exhausted and the credit line of Rs110 billon is blocked.
PSO is left with no choice but to freeze its business with the power sector once current supplies are completely exhausted.
PSO had said that it could commence business with the power sector once its receivables were cleared or at least all liabilities on account of demurrages, damages to banks and suppliers are written off.
It also highlighted that lack of financing due to the power sector would also affect white oil supplies and its imports because of the blocking of LCs. The entity added that it was unable to continue supplies to the power sector and will stop further supplies of furnace oil unless its liabilities are discharged.
PSO had sought permission from the petroleum ministry to deal with the power sector as per contracts.