The funds raised by the government through Sukuk, an Islamic financing instrument, have crossed Rs. 2 trillion. During 2008-2017, the government raised funds to the tune of Rs. 936 billion through various issues of Government Ijara Sukuk (GIS).
The government has been raising funds through an Islamic instrument rather than conventional and interest-based government bonds, including T-Bills and Pakistan Investment Bonds (PIBs). The shift in policy saves billion to the national exchequer, according to industry experts.
Sukuk is an Islamic instrument of raising funds through which Islamic banks own the assets of the issuer (the government) for an agreed period. Banks provide financing to the issuer and then generate revenues from the state assets. This phenomenon also helps greatly to support the Islamic banking industry in Pakistan.
The government of Pakistan has raised two issues of Rs. 400 billion through Pakistan Stock Exchange (PSX) as Pakistan Energy Sukuk I and II. The issues were intended to meet budgetary needs and promote Islamic banking in Pakistan, according to the Ministry of Finance.
Experts say they can be used to raise funds not only by the government but also by the private sector.
The federal cabinet Saturday approved an increase in dealers’ margin to Rs. 7 per liter on the motor spirit (MS) and high-speed diesel. Ministry of Petroleum took the approval of the increase in dealer’s commission on the sale of petroleum products through circulating a summary.
The Petroleum Division submitted a summary on the revision of OMCs and dealers’ margins on petroleum products. The existing margins were fixed in December 2021. Pakistan Petroleum Dealers Association has approached the government for immediate revision of their margins due to inflation, increase in tariff salaries, and utility bills.
The committee approved the proposal to fix the margin of dealers at Rs. 7 per liter. The increase in the proposed margins for dealers may be accounted for in the forthcoming selling price from the 1st August 2022, in accordance with the agreement with the dealers and the Ministry of Petroleum and Natural Resources (MPR).
However, after intense negotiations, PPDA agreed to margins of Rs. 7 per liter for both MS and HSD and based on the agreement and the commitment that the revised margins will be made effective from August 2022.
Sources say Pakistan can get additional funds from Saudi Arabia under the Special Drawing Rights (SDR) quota, an international reserve asset created by the IMF. Pakistan and the International Monetary Fund (IMF) have held discussions in this regard, sources told ProPakistani.
Final decision on Pakistan’s participation in the International Monetary Fund (IMF) program is yet to be made. The conditions include the collection of general sales tax (GST) and petroleum development levy (PDL) on petroleum products. IMF has also demanded immediate implementation on the power sector reforms.
Pakistan has committed to resuming power sector reforms including, critically, the timely adjustment of power tariffs. The delayed annual rebasing and quarterly adjustments will improve the situation in the power sector and limit load shedding, Pakistan’s Energy Minister Ghulam Ishaq Khan has said.
The International Monetary Fund (IMF) announced on Thursday that it has reached a staff-level agreement with Pakistan. The agreement would pave the way for the disbursement of $1.17 billion and increase the total loan size to $7 billion, subject to approval by the IMF’s Executive Board.
Average household income in Pakistan has grown by 69 percent as compared to 49 percent expenditure growth over the last 20 years. Data shows that average household income grew from Rs. 16,000 in 2001 to over Rs. 26,000 in 2018, to increase further in the following years.
Rural households owned 32 percent more wealth than urban households on average between 1997 and 2018, according to a World Bank report. The gap between expenditures and income has widened over the last 20 years, the report said. Economists say widening gap between incomes and savings has enabled Pakistanis to increase their savings.
Household savings account accounts for more than 80 percent of Pakistanis’ budgets, according to the latest government data. Income starts outpacing household expenses in the early 40s and the savings rate grows by 20 percentage points by the age of 55, it shows.
Potassium sulfate prices have surged by 170 percent, registering an increase of Rs. 12,816 per bag. The prices of diammonium sulfate have also increased from Rs. 5,584 per bag to Rs. 11,425, registering a 104 percent increase.
Prices of urea have risen from Rs. 1,746 to Rs. 2,337 per bag, according to PBS. Calcium Ammonium Nitrate (CAN) prices have also gone up by nearly 50 percent. Some varieties of CAN are available in the market for as much as Rs. 3,000 per bag.
MPCL has announced that its Bannu gas field would provide gas at a doubled gas flow rate. This was possible as a result of extra technical and exploratory efforts. The gas flows at the well have doubled to 50 MMSCFD from initially reported flow rate of 25 MmsCFD.
MPCL is the operator of Bannu West Block, with 55 percent working interest along with the Oil and Gas Development Company Limited (OGDCL) and Zaver Petroleum Corporation (Pvt) Limited (ZPCL). The well was spud-in on 6 June 2021.
This is a promising development for Pakistan as other areas recorded in history have not offered much in major discoveries and overall gas production. Currently, there is little infrastructure available to transport gas, and it may take years to connect the new exploits to the national grid.
KSE-100 lost over 1,000 points after opening trade at 42,716.97. Prime Minister Shehbaz Sharif announced a 10 percent “super tax” on large-scale industries. Fertilizer, oil & gas, and cement were the top negative contributors to the bourse.
The KSE-100 index fell 4.83 percent after Prime Minister Shahbaz Sharif’s speech. PM imposed a super tax on top industrial arms, including cement, steel, sugar, oil and gas, fertilizers, textile, banking, automobile, cigarettes, beverages, and chemicals.
Production of ghee and cooking oil halted or retarded in Pakistan due to the non-availability of raw materials. The industry has shared this alarming situation with the Ministry of Industries and Production. The meeting was held with Industry Secretary Imdad Ullah Bosal on Monday.
The Pakistan Vanaspati Manufacturers Association (PVMA) held an exclusive meeting with the Minister for Industries and Production. The association sought information on the costing of vegetable ghee and cooking oil in compliance with price control and prevention of profiteering order 2021.
On the sidelines of meetings, factors such as low domestic stocks of edible oil, depreciation in the value of the Pakistani Rupee, and other compulsions adversely affecting the price movement of end products (ghee/cooking oil) were also discussed by Pakistan’s top officials.
The arrival of cargoes is of those contracts executed in March/April at a price range of $1,750 – 1,850 per ton. At the time of the opening of L/Cs, the US Dollar was at a parity of Pakistan Rupee 182; today, it is Rs 210.
Industry players have now started placing orders for Chinese goods, despite the noticeable uncertainties and substantial financial risk factors. However, under the above-stated unprecedented and highly unpredictable state of affairs, many importers and manufacturers had been reluctant to execute further orders due to political and economic uncertainty.
PVMA said that almost half of the manufacturing units have halted or retarded their production and thus may not be able to comply with the latest costing requirement. Therefore, it requested that the notice be withheld till such a time when domestic stocks are normalized, the budget is formalized, and market forces are stabilized.
The Special Judge Customs, Taxation, and Anti-smuggling Rawalpindi/Islamabad has issued summons to Habib Metropolitan Bank officials for dodging the tax authorities. The accused, including the Manager of Operations Metropolitan Bank, appeared before the court on June 21, 2022.
The five accused were holding money on behalf of a taxpayer company-in-default, M/s Tahir Builders (Private) Limited. Income tax demand of Rs. 267.9 million was outstanding and recoverable against the taxpayer because of default u/s 122(5A) of the Income Tax Ordinance, 2001.
The recovery notice u/s 140 read with rule 69 of Income Tax Rules, 2022, was served to Manager Operations Habib Metropolitan Bank, on 6 June 2022, for the recovery of tax dues. However, the bank officials did not debit block the taxpayer’s bank account maintained at their branch.
The Federal Board of Revenue (FBR) has said that the bank officials, in connivance with the taxpayer, transferred an amount of Rs. 20.05 million from their account on the same day, i.e., 6 June 2022. This violated notice u/s 140 of the Income Tax Ordinance 2001.
Habib Metropolitan Bank Limited and Chief Compliance Officer were fully aware of the fact and willfully and knowingly aided and abetted the accused officials in committing the offenses. They are liable to be prosecuted under sections 196 and 199 of the Income Tax Ordinance 2001.
The Federal Board of Revenue (FBR) has withdrawn the notice under section 140 of the income tax ordinance 2001 against M/s Tahir Builders. The information sought to recover Rs. 267.9 million from Mr. Tahir’s bank account, which was granted a stay by an appellate tribunal.
The federal government has set a target to collect Rs. 750 billion on the petroleum development levy in the next fiscal year 2022-23. The previous government had set a levy collection target of Rs. 610 billion. However, in the revised estimates, it was brought down to Rs. 135 billion.
Minister for Finance Aisha Ghaus Pasha said the government has no plan to immediately impose the petroleum development levy. She added that the focus is to remove the subsidies on petroleum products. The minister said the target is to achieve by the end of the year.
Finance Minister Arun Jaitley has said that the government may impose a levy on petroleum products, including petrol and diesel, from next year. The levy could also be imposed if oil prices decline in the international market, she said during her maiden speech at the World Economic Forum in Switzerland.
The government is projected to collect Rs. 750 billion on account of petroleum development levy in the next fiscal year 2022-23, Finance Minister Arun Jaitley has said. However, the minister did not confirm whether a commitment had been made with the International Monetary Fund (IMF).