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Musadik Malik says gas load-shedding inevitable despite extra LNG in January

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  • Country to have additional 200 million MMCFD LNG in Jan-Feb.
  • Govt encourages private sector to invest in new LNG terminals.
  • Planning to import 20,000 tonnes of extra LPG for winters.

ISLAMABAD: Musadik Malik, the Minister of State for Petroleum, on Monday warned that gas loadshdding is inevitable in the coming months despite the arrangement of additional 200 million cubic feet per day (MMCFD) liquefied natural gas (LNG) in January-February 2023, compared to the same period last year.

“Despite the availability of an extra LNG cargo during the upcoming peak winter season, gas load-shedding will be inevitable,” Malik said while briefing the Senate Standing Committee on Petroleum in a meeting held under the chair of Chairman Committee, Senator Mohammad Abdul Qadir.

“In January, Pakistan will have ten LNG cargoes, while in February nine of them will be available for local consumption, while this extra liquefied gas will be imported by state-run companies.”

Malik said the government would encourage the private sector to invest in new LNG terminals.

The state petroleum minister was critical of the supply of gas to the fertiliser-makers at discounted rates.

“The gas costing Rs4,000/MMBTU was being supplied to the fertiliser factories for just Rs250/MMBTU under the pressure of the fertiliser mafia,” the minister said.

A poor common consumer pays $17/MMBTU, while the exporting sector gets the same gas for $9/MMBTU; however, it is provided to the fertiliser-makers at a meagre $1.35-3/MMBTU.

“It is true exports are also important, the gas sector circular debt has ballooned to Rs1,500 billion,” he said adding, “We have to strike a balance between gas prices. We did not buy gas when it was available at $2-2.5/MMBTU. Now it has reached $40/MMBTU.”

Malik also informed the meeting that the country was also planning to import 20,000 tonnes of liquefied petroleum gas (LPG) for winter months.

Speaking on the occasion, PTI’s Senator Saifullah Abro said foreign investment in the gas sector would be highly welcome. “However, we need to be careful lest these investing companies should trap the country into paying them capacity payments like some independent power producers (IPPs),” Senator Abro said.

During the meeting, Abro and Malik traded barbs over mismanagement in the buying of LNG.

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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Pakistan currently has $14.38 billion in foreign exchange reserves.

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Pakistan’s commercial banks’ reserves, which stood at $5.28 billion at the conclusion of the week ending on June 7, rose by US$174 million, according to a central bank statement.

Reserving US$6.2 million less, the SBP now has US$9.10 billion in reserves. The causes for the decline in the reserves it had were not disclosed by the central bank.

The SBP released a statement that stated, “SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on 07-June-2024.”

The State Bank of Pakistan’s (SBP) foreign exchange reserves were reduced by US$ 63 million as a result of repaying external debt, with the reserves standing at US$ 9.093 billion as of earlier on June 6.

The central bank spokesperson said in a statement that as of the week that concluded on May 31, the nation’s total liquid foreign reserves were $14.31 billion.

In terms of net foreign reserves, commercial banks have US$ 5.22 billion of the overall foreign reserves, according to the SBP.

SBP reserves dropped by US$ 63 million to US$ 9,093.7 million during the week that ended on May 24, 2024, according to the announcement.

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In the local market, the price of gold plummets to Rs240,700/tola.

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Gold with a 24-karat purity level has dropped by Rs1200/tola on the local market.

Each tola of 24-karat gold is now selling for Rs240,700, with a further drop of Rs1029 bringing the price of 10 kilos of gold to Rs206,361. These figures are courtesy of the All Sarafa and Jewelers Association.

Meanwhile, after a $2 decline on the global market, one ounce of gold will be valued $2315.

A tola of gold was worth Rs 600 more on Wednesday.

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