Re: Pakistani Economic Stress Watch
Posted: 16 Jan 2015 16:42
Quite possible that badmash has gone to Barbaria to beg for money/petrol. Perennial beggars that the pakis are.
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What is 'white oil'?K Mehta wrote:
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.
http://www.thenews.com.pk/Todays-News-1 ... -dries-outHowever, the official data about the circular debt and receivables of the Pakistan Electric Power Company (Pepco) tells an entirely different story and negates the claim of the government that recovery of electricity bills has improved. The data shows that the circular debt has again swelled to Rs280 billion whereas the receivables have risen to Rs576 billion.
The data says that Sindh has to pay Rs63 billion to Pepco, Punjab Rs4 billion, Balochistan Rs7 billion, KP Rs1.6 billion, AJK Rs43 billion, and K Electric Rs32 billion.
According to the data, private sector has surprisingly emerged as the biggest defaulter as it owes to pay Rs388 billion. Out of Rs388 billion, the running defaulters which are mainly influential business tycoons running their factories are required to pay about Rs100 billion, but the government has not only failed to recover the said amount from them, but criminally continues to provide them electricity. In the list of running defaulters, the top mandarins without sharing the list told ‘The News’ that many business establishments of some towering political figures are also included.
Daily consumption of petrol in Pakistan is 10k tonnesHe said a vessel carrying 50,000 tons of petrol has arrived in Karachi that will be unloaded by today (Friday). This will also help provide solace in restoring the supply of petrol to Punjab.
The current oil crisis has already brought down electricity generation by over 2,000MW, raising the deficit to 7,000MW and cutting supplies to half of the total demand of over 14,000MW. More power plants are likely to suspend working in a few days because they are running out of furnace oil, the power sector’s managers warned on Saturday.
To save domestic consumers, who are already facing around 12- hour outages, from further suffering, the managers have increased loadshedding for the industry from four to 10 hours.
The company is struggling to keep bigger plants like Hubco, Muzaffargarh and Jamshoro alive because, if they go down, the entire system would collapse.
The country is left with oil stock of less than three days and its import has totally dried up as the Pakistan State Oil defaults on its payments and says it will need at least Rs100 billion and eight weeks' time to retrieve the situation.
NEW DELHI: India's Directorate of Enforcement has issued a notice to Pakistan International Airlines (PIA) asking it to “dispose of” its properties in New Delhi calling their purchase as “unauthorised”, according to a report on The Hindu.
The notice sent to PIA said the properties in New Delhi were acquired in contravention of the Foreign Exchange Management Act and without prior permission from the Reserve Bank of India.
“We are at a loss to understand why they are acting now, and how we will operate without a marketing and sales offices,” PIA Manager in North India, Saeed Ahmad Khan, was quoted in the report.
He added that the airline had been operating at the New Delhi premises since the past nine years and the Reserve Bank of India had been duly informed at the time of purchase in 2005.
PIA spokesman Rana Hanif told Dawn that its staff in New Delhi would appear before Indian authorities on January 29 and present the record and documents pertaining to the purchase, which had been carried out in accordance with the law.
Commenting on the denial of visa extension to PIA staff, Hanif said that, "Given the relations between India and Pakistan, denial of visa extension is a routine issue faced by the airline's staff; the visas are normally extended via diplomatic means."
He added that the staff had been instructed to maintain contact with the Pakistan High Commission in New Delhi in this regard.
Nine years since RBI first wrote to the Finance Ministry, notifying it about the PIA acquisition, the Department of Economic Affairs (DEA) had informed RBI in June 2014 that “the proposal has been examined and rejection of the Government of India is hereby conveyed to the proposal of M/s Pakistan International Airlines for acquisition of immovable property at New Delhi, India”.
PIA had bought four flats in Kailash Building in Kasturba Gandhi Marg totaling 2,576 square feet in 2005 from the “surplus funds of Pakistan International Airlines, New Delhi”, according to the declaration the PIA submitted with the RBI in 2005. In the declaration, PIA had stated that the property was bought for its offices.
Directorate of Enforcement is a specialised financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces the following laws: -
Foreign Exchange Management Act,1999 (FEMA) - A Civil Law, with officers empowered to conduct investigations into suspected contraventions of the Foreign Exchange Laws and Regulations, adjudicate, contraventions, and impose penalties on those adjudged to have contravened the law.
Officials said FEMA laws stipulate that "no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Nepal or Bhutan without prior permission of the RBI shall acquire or transfer immovable property in India other than lease, not exceeding five years."
PIA, they said, was allegedly found contravening the above mentioned clause and hence ED has issued summons to it for scrutiny of official documents and records after which the agency will decide the further course of action to be taken.
In time of Prophet (PBUH) there was no petroleum, electricity and all such haraam stuff.Chinmayanand wrote:Bakistan entering Islamic age. AoA is kind indeed on bakis .
However, a senior finance ministry official said the failure to build up fuel stocks was due to the ministry seeking to maintain tight control of expenditure on oil imports to keep within spending limits agreed with the International Monetary Fund under a loan programme.
There is no electricity for most of the day, no gas and now no petrol. We are now being told that because of the oil shortage, the power crisis will worsen. How long does the government think it has before the masses, deprived of every amenity imaginable, turn violent on the streets?
http://www.pakistanherald.com/news/3738 ... 00-companyPakistan State Oil becomes Forbes 2000 Company
They probably have their own reserves, but you can safely bet that the officers are dipping into it for "personal use".kancha wrote:Any thoughts on how this might affect their military preparations/ongoing ops?
Does the military maintain its own, separate reserves?
According to PSO officials, no oil consignment has arrived at any port in the country for the past two weeks, whereas usually six to eight ships, each carrying 65,000 tons of oil, come to the country in a fortnight.
“The company has exhausted all its overdraft (OD) facilities over the past few weeks. All its LCs (letters of credit) lines have been choked as its total receivables now run over Rs215bn,” a PSO official said, adding that the power sector owed Rs190bn and PIA Rs12.5bn.
“The company needs at least Rs100bn immediately to set things right. Even if it gets the required money, it will need another two months to line up imports and restore the supply line,” the official said.
On the bright side, with the oil shortage, the masses will not have the means to burn down the high court (or the local KFC) this time aroundRSoami wrote:Cross Post
http://www.dailytimes.com.pk/editorial/ ... ing-crisisThere is no electricity for most of the day, no gas and now no petrol. We are now being told that because of the oil shortage, the power crisis will worsen. How long does the government think it has before the masses, deprived of every amenity imaginable, turn violent on the streets?
'White' oil is gasoline / petrol and diesel, refers to their clearer hue, and is typically more expensive than fuel oil / heavy fuel oil, which are used for power generation and shipping. Given that oil prices are down ca 50%+ over the last 6-8 months, it's even more surprising that they can't afford it. Going to hell ....deejay wrote:What is 'white oil'?K Mehta wrote:
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.
Seriously? He could have blessed them with some common sense, decency and humanity. It's s total hell hole.Yogi_G wrote:I had a colleague in massa tell me that SA got all its oil as a gift from Allah for Mo having been born there. As citadel of Islam they must come help Al Bakistan.
Gyan wrote:Pakistan lifeline ie worker forex remittance from Arab nations is going to fall drastically
I think these two are probably happening and hitting Pakistan hard. Another pressure point would be drop in export of Textiles to Europe reported earlier. This is going to suffer further with drop in production with this problem in Oil supply.eklavya wrote:Actually I made a wrong assumption in assuming lower oil prices make it more affordable for the Pakis. They probably never pay for it anyway. And given that the price has halved, the Saudis can't afford to give it away for free!
By all appearances, they went below $0B a long time back, and are still alive and kicking. Quaid-E-Duh, as a certain someone used to say.Otherwise these numbers are meaningless. Nothing happened when they were under $3B and nothing will happen if they are $0B.
Regarding first partShreeman wrote:Every $$ taken is one less to be given away, and as long as central govt isnt getting them (just routed through delhi for technical reasons) there is no downside.
Otherwise these numbers are meaningless. Nothing happened when they were under $3B and nothing will happen if they are $0B.
KARACHI: In the third open market operation (OMO) of 2015, the State Bank of Pakistan (SBP) injected liquidity of Rs526.6 billion into the banking system on Monday.
The cash injection was aimed at addressing the shortage of liquidity that has affected the banking system for the last three months.
According to data released by the SBP’s Domestic Markets and Monetary Management Department, the liquidity-injecting OMO had a tenor of four days with the accepted rate of return clocking up at 9.3% per annum.
The latest injection follows OMOs on January 2 and January 9 that injected Rs513.1 billion and Rs694.1 billion, respectively, into the banking system.
I believe they had a couple of explosions on a gas pipeline (originating somewhere in Balochistan) feeding a couple of power plants that produce power for the pakjab region. Plants rendered idle till gas supply resumes. No furnace oil for some power plants and then some brain had a light flicker ... so now no gas supply for a few more power plants. Bad times. Wulllllnnnnneraaaaaaaaaaabeeeeleeeeteeeees onleeee !.K Mehta wrote:Round 2 begins
Power crisis worsens across Punjab, Balochistan
LAHORE/QUETTA: If the petrol shortage wasn’t enough for consumers in Punjab, citizens across the province as well as in Balochistan now face electricity crisis as well.
According to reports, unannounced load-shedding has increased up to 18 hours a day across Punjab.
Reports from Quetta said that the shortfall across Balochistan has reached 1350 MW. The load-shedding in Quetta has increased up to 8 hours a day, and up to 16 hours in the rest of the cities across the province.
Sources said that furnace oil supply to Guddu, Hubco and several other power plants has come to a halt resulting in suspension of electricity production. Power generation in the country has fallen by 50 percent.
According to Pakistan Electric Power Company (PEPCO) officials, the shortfall in electricity production is due to the reduction in supply of gas, furnace oil, and funds.
Lack of power will have a strong knock-on effect on the rest of the economy.The character deleted from this story was the power sector. Furnace oil is what straddles the power and petroleum sectors. And this is really a furnace oil payment cycle crisis.
Furnace oil accounts for almost half of our fuel import bill. A third of all our electricity is generated by burning furnace oil. And while there is no crisis in other products which are sold on cash and on which PSO and other oil marketing companies make a neat profit margin, furnace oil is what causes them cash flow difficulties.
The previous PPP-led ruling coalition had pumped Rs1.5 trillion into the power sector to cover for losses caused by inefficiencies and theft.
But it could not muster the political capital necessary to undertake the painful power sector reform during its tenure, especially as oil prices were going through the roof. The present government injected another Rs500 billion at the start of its term into a sector that was hemorrhaging nearly Rs1bn a day. But because the root causes were not addressed, the hemorrhaging continued and it’s piled up again.