Business

Gas crisis to aggravate as supplier refuses to deliver LNG cargo

Published

1 year ago

Farwa

ENI to not deliver February’s cargo purchased at cost of 12.14%.
This will result in reduced supplies to power sector.
End consumers to get costly electricity.

ISLAMABAD: Pakistan is expected to witness an aggravating gas crisis in February as an Italy-based LNG trading company, ENI, intimated that it will not be able to deliver its term LNG cargo due on February 6-7 by claiming the force majeure, The News reported Monday citing a senior official of the Energy Ministry.

“The gas deficit will soar as imported LNG will reduce to 700mmcfd as only five cargoes, at the price of 13.37% of Brent, and 2 cargoes, at 10.2% of Brent under GtG agreements with Qatar, would be available in February. There will be no LNG cargo from ENI at the cost of 12.14% in the month of February. And this will increase the gas crisis in the country.”

The news has disturbed the top mandarins of the Petroleum Division as the country is already facing an acute gas crisis. The crisis has been affecting domestic users in some main cities, with little to no pressure.

The government under its gas load management plan promised gas supply to domestic consumers for cooking times in winter — three hours in the morning from 6am to 9am, two hours from 12 noon to 2pm for lunch, and three hours from 6pm to 9pm for dinner. The ground realities speak otherwise.

Relevant authorities say the impact of ENI backing out will come in the shape of reduced supplies to the power sector and the projected supply of 325mmcfd to the sector next month will not be available.

The reliance on furnace oil-based electricity will increase and end consumers will get costly electricity. The captive power plants will be supplied gas at 50% and supply to fertiliser plants, compressed natural gas (CNG) and local industry shall remain discontinued.

Earlier, the Petroleum Division had claimed that the ENI from January 2023 onward will not default but that is not the case.

When contacted, ENI spokesperson also confirmed the development, saying: “February delivery disruption is beyond the reasonable control of ENI and due to an event of Force Majeure. ENI does not benefit in any way from the situation.”

According to the senior official, ENI defaulted five times in 2022; it failed to provide LNG cargoes in the months of March, May, July, September, and November.

Business

“Ten companies express interest in purchasing PIA.”

Published

33 mins ago

Farwa

Ten businesses, including three domestic aviation companies, have put in their bids.

According to the sources, other organizations interested in purchasing the majority of PIA shares include Fly Jinnah, AirSial, Arif Habib Group, Shujaat Azeem Group’s consortium, Tabba, Tariq Group, and Sehgal groups.

In order to provide these businesses more time to complete their bids, the PIA privatization deadline, which was originally set for May 3 (today), has been extended to May 18.

The Federal Minister for Privatization, Abdul Aleem Khan, declared in his announcement that the deadline for submitting statements of interest for national flag carriers will not be extended.

Sources claimed that although the Privatization Commission and the PIA administration ran a number of roadshows, they were not very successful.

An earlier request for a 30-day extension to hold its annual general meeting (AGM) was made by Pakistan International Airlines (PIA).

Citing inadequate financial reports and an audit as reasons for the delay, the national flag carrier has applied to the Securities and Exchange Commission of Pakistan (SECP).

A letter explaining the extension and its rationale to shareholders was also sent by the airline to the stock exchange.

The request for a postponement is connected to PIA’s current privatization process, according to people with knowledge of the situation.

Following the requested delay, they estimate that the AGM will occur by May 30.

Business

Pakistan has $13.316 billion in total foreign reserves.

Published

41 mins ago

Farwa

The central bank’s foreign reserves rose by $25 million to $8,006 million during the week under review, according to a statement released by the SBP here on Thursday.

It also stated that commercial banks reported holding $5,310 million in net foreign reserves. As of the previous week, which ended on April 19, 2024, the nation had $13,280.5 million in total liquid foreign reserves.

Among them, the central bank had foreign reserves of $7,981.2 million, while commercial banks had net foreign reserves of $5,299.3 million.

According to the State Bank of Pakistan (SBP), Pakistan got the much expected $1.1 billion last payment from the International Monetary Fund (IMF) as part of the $3 billion standby agreement on Tuesday.

The Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

According to the central bank, the payment will show up in SBP reserves for the week that ends on May 3, 2024.

Business

Support from the US for Pakistan’s IMF pact

Published

1 hour ago

Farwa

Matthew Miller, a spokesman for the department, stated, “We support efforts to stabilize its economy, including reaching an agreement with the IMF.”

He declared, “Our trade and investment ties, as well as our technical engagements, are all priorities of our bilateral relationship, and we will continue to engage with them through their economic success.”

it is important to note that an International Monetary Fund (IMF) delegation will visit Pakistan this month to talk about a new “long-term and larger” loan package designed to assist the government in paying back billions of dollars in debt that is due this year.

Discussions on a new loan plan have been set between Pakistan and the foreign lender. There will be two stages to the meetings: technical discussions and policy-level conversations.

Prior to the upcoming negotiations, Pakistan must overcome formidable economic obstacles, including the collapse of an IMF-proposed tax amnesty program.

As part of the $3 billion standby arrangement, Pakistan recently got the much awaited $1.1 billion last payment from the IMF.

Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

Pakistan is requesting a new, longer-term loan from the IMF, and according to Finance Minister Muhammad Aurangzeb, Islamabad could get an agreement at the staff level on the new program by early July.