Pakistan Has Already Consumed Most of Its Oil and Natural Gas

Pakistan has consumed 79.8% of its total oil reserves and 66.6% natural gas reserves. There are currently 249 million barrels left in reserves. Pakistan has used 985 million barrels of oil out of its 1,234 million barrels, which is 79.9% of the total.

Pakistan is a major producer of gas, used to meet its domestic needs. The country has consumed 66.6% of natural gas so far, with 33.4% remaining untapped. Since 2000, exploration and production (E&P) companies have not been capable of increasing gas production.

Pakistan has 33% of its own gas, 10% LNG, and 1% liquefied petroleum gases (LPG). Domestic production is at a deficit of 0.507 TCF between production and demand. The share of LNG in natural gas supply has increased to 29% over time.

This can be addressed by the reduction of gas supply or load management to different parts of the economy.

ECC Okays Measures for Early Start of Reko Diq Project

The meeting of the Economic Coordination Committee (ECCECC) of the cabinet has approved two important agenda items related to the Reko Diq project. The meeting was presided over by Finance Minister Ishaq Dar, who is also chairman of the ECC.

The amount held in an escrow account in connection with the Reko Diq Project dispute settlement has been calculated by the Ministry of Energy. The federal government and government of Balochistan entered into an out-of-court dispute settlement with Tethyan Copper Company Pvt Limited.

The Federal Government has to clear liabilities to Antofagasta PLC. The ECC allowed Finance Division to arrange the interest payable for the Balochistan government’s share of $8.51 million from the loan of Rs. 65 billion already raised by GHPL.

It approved a proposal of the Finance Division on the funding plan of the federal government for the share of the Balochistan government in the Reko Diq Project.

Germany Keen to Benefit from Investment Opportunities in Pakistan: Envoy

Ambassador of Germany showed keen interest to benefit from investment opportunities in Pakistan. He called on Finance Minister Ishaq Dar at Finance Division. Minister highlighted bilateral relations with Germany and importance of enhancement in trade and economic relations between the two countries.

The finance minister discussed the economic policies of the new government and potential avenues for investment from Germany in Pakistan.

Fact Check: No, Google Play Store Isn’t Going Away in Pakistan After December 1st

Android users in Pakistan won’t be able to download Google Play Store apps. Purchasers of paid apps through mobile carrier billing as carrier payments were stopped by the State Bank of Pakistan. The SBP is trying to limit the outflow of dollars to global tech companies.

The payment of $34 million to overseas service providers like Google, Amazon, and Meta, has been frozen. Pakistani users can continue to buy apps or use paid services through credit or debit cards only. The SBP suspended Direct Carrier Billing (DCB) on Friday.

The SBP has revoked the mechanism for payment of dollar fees in light of the country’s liquidity crisis. In this regard, the Ministry of Information Technology and Telecommunication (MoITT), the Pakistan Telecommunication Authority (PTA), and four cellular mobile operators (CMOs) unanimously wrote a letter to the SBP.

If this is successful, users would be able to buy apps through Google Play Store directly from their mobile phone providers.

SBP Working on QR Code for Quick Payments

SBP Governor Jameel Ahmad said that the central bank is working on various digital initiatives including the launch of a quick response (QR) code by next year. The code will enable small merchants to receive payments from their customers instantly. He was talking about the financial horizon of the country at Pakistan Fintech Forum 2022.

SBP is working intensively to make a conducive environment for fintechs that promise solutions for financial inclusion, Governor SBP has said. He said SBP is also conducting the cost-benefit analysis of central bank digital currency (CBDC), he added.

He said that owing to the new disruptive technologies, today’s consumer preferences as well as the needs of businesses are evolving rapidly. He said that fintechs are now accepted by both traditional financial institutions and non-financial players, ranging from smart startups and large technology firms.

Governor Muhammad Zubair has called for the development of a tech-based financial ecosystem in Pakistan. App-based platforms are playing an important role in providing financing to various sectors such as agriculture, SMEs, housing, etc., and also helps in better risk management.

State Bank to Announce Monetary Policy on Friday

The Monetary Policy Committee of the State Bank of Pakistan (SBP) will meet on November 25, 2022 in Karachi to decide on the Monetary Policy. The central bank will issue its Monetary Policy Statement through a press release on the same day for the first time.

Expectations and market sentiment indicate that the interest rate will remain unchanged this time as well, reports BBC’s Nafees Zakaria.

CPI inflation increased to 26.6 percent in October 2022 due to a major adjustment in electricity tariffs. Imports fell 13 percent, and the trade deficit fell to $2.3 billion. This is likely to keep a check on the current account deficit going forward.

Pakistani Companies Awarded 4 New Areas in Balochistan for Oil and Gas Discovery

The Ministry of Energy has awarded four new blocks to exploration and production (E&P) companies in different areas of Balochistan. Mari Petroleum Company Limited (Mari), Pakistan Petroleum Limited (PPL), and Oil and Gas Development Company Ltd (OGDCL).

Oil and gas blocks have been granted to exploration and production companies. The blocks will be used for the exploration and development of oil and gas fields. High stakes operators in a block will act as operators in the designated block, while the rest of the companies will be joint-venture partners.

Details of the blocks provisionally awarded to oil exploration companies are:

  • South Pishin Balochistan: MARI (37%), PPL (35%), OGDCL (28%).
  • Shaigalu Balochistan: PPL (40%), MARI (30%), OGDCL (30%)
  • Tanishpa Balochistan: OGDCL (37%), MARI (28%), PPL (35%).
  • Lugai Balochistan: OGDCL (40%), MARI (30%), and PPL (30%).

According to the stock filing, the formal award of petroleum rights in the aforementioned blocks is conditional on the following, for each of the blocks: signing of petroleum exploration licenses and execution of petroleum concession agreements with the government; execution of joint operating agreements among the respective JV Partners; and completion of related legal and procedural formalities.

PTI Chairman Imran Khan Announces New Committee to Revive Pakistan’s Economy

Imran Khan has constituted a special committee, comprising of political and economic experts, to propose remedial measures for the economic recovery of the country. It was agreed that the former Finance Minister Shaukat Tareen will head the economic committee headed by Imran Khan.

The committee will include experts from finance, energy, industry, social welfare, trade, and agriculture.

Govt to Cut Development Budget by Rs. 100 Billion to Support Flood-Hit Areas

The Federal Government is likely to impose a cut of up to Rs. 100 billion on the Public Sector Development Programme (PSDP) 2022-23. The PSDP is the key government expenditure that impacts growth rate directly. To help the flood-affected areas with additional funds, the Planning Commission is evolving a mechanism for imposing cuts.

The fast-moving, important and new PSDP projects are likely to be exempted from the cut while the slow-moving and less important projects will face the brunt, a source said. There are three components of the Federal Developmental Outlay which include the rupee component, Foreign Exchange Component(FEC) and Viability Gap Fund (VGF).

The fund can be surrendered to the Prime Minister Flood Relief fund, Finance Division or Accountant General, he said.

KP Govt Withdraws Commitment of Provincial Surplus Risking IMF Deal

The move could potentially weaken Pakistan’s case for the resumption of the International Monetary Fund (IMF) program. Khyber Pakhtunkhwa’s Finance Minister Taimur Khan Jhagra says federal government had committed to resolving major financial issues of KP.

Jhagra: “In return, I obtained the authorization of the Chief Minister, for the province of Khyber Pakhtunkhwa to sign on to the memorandum of understanding (MoU) and did so within 24 hours”. He adds that in the intervening period of almost 2 months, he has been unable to get time to meet either the Minister or the Secretary.

The provincial minister also listed some of the key issues that remain pending. The issues listed include:

  1. Issue of budget allocations for ex-FATA.
  2. Commitment to monthly net hydel profit (NHP) transfers based on the MoU signed between the federal government and Khyber Pakhtunkhwa in 2016.
  3. Revival of National Finance Commission (NFC).
  4. A commitment from the federal government to immediately engage and resolve other financial issues with Khyber Pakhtunkhwa.
He says that the recent flooding has caused destruction in the province and the damage from the floods is greater than that of the super-floods of 2010.
The center had agreed in the Memorandum of Economic and Fiscal Policies inked with IMF to present a MoU duly signed by provinces for the provision of cash surplus by them. Khyber Pakhtunkhwa government signed the MoU regarding fiscal responsibility after the federal government agreed to address its issues.