Year: 2021

Don’t shoot the messenger

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Last week, the media was abuzz about SAPM on power and petroleum Tabish Gauhar’s letter that he addressed to his minister Hammad Azhar. The gist of the ‘leaked’ letter and any spirit of debate were lost in the media hype created around the differences within energy ministry or largely within the government. But we often forget that difference of opinion is a democratic norm and a healthy debate can only lead to advancement. Secondly, the kind of mess the energy sector is in, it cannot be solved without challenging the…

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LNG sector in Pakistan — V

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What would it take to maximize returns from the ongoing deregulation and run the overall gas sector on a sustainable basis? In order to maximize returns from private sector involvement and ensure sustainability of the overall natural gas sector, it is important to first adopt a holistic approach to resolve the deep-rooted structural and operational challenges. Underpricing of the fuel is a major challenge, and unless the subsidy structure is rationalized and ultimately done away with, the financial viability of the natural gas sector would be difficult. As observed in…

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New plan pitched to create fiscal space for gasping energy entities

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As the petroleum sector circular debt stands at a whopping Rs1.6 trillion or 3.35 percent of GDP, the government has another plan to create fiscal breathing space for the entities gasping for cash, according to official documents. With petroleum sector circular debt hovering over Rs1.6 trillion including Rs1.1 trillion principal plus Rs500 billion late payment surcharge, Ministry of Energy has started to deliberate upon a new plan to reduce liquidity problem of the companies trapped in the vicious debt cycle, according to official correspondence on reforms pertaining to various strategic…

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Pakistan Oil Refinery Policy 2021 finalised

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The government has finalised the Pakistan Oil Refinery Policy 2021 with huge package of tax incentives, including 20-year income tax holiday for all taxes under the Income Tax Ordinance 2001 and upgradation of existing and new deep conversion refineries from the date of commissioning of the project. However, there will be no product off-take and rate of return guarantee for new and existing refineries. And more importantly, the product pricing formula of refineries will be based on “True Import Parity Price” to be derived from the Arab Gulf Mean FOB…

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Experts approve key UN report on climate change

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Representatives from 195 countries on Friday approved a critical UN science report that will provide the most comprehensive and up-to-date assessment yet of the state of Earth’s climate. “Today, #IPCC’s latest #ClimateReport — #ClimateChange 2021: the Physical Science Basis — was approved and accepted in a historical first virtual approval session,” the Intergovernmental Panel on Climate Change tweeted on Friday. IPCC delegates have been locked in virtual negotiations for two weeks, vetting a 30-page “summary for policymakers” — line-by-line, word-by-word — of an underlying scientific report years in the making.…

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