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Pakistan asks US if sanctions on Iran will impact gas pipeline project



  • US hasn’t responded to Pakistan yet.
  • Iran terms US sanctions “illegal.”
  • It’s been almost 13 years since the agreement was signed.

ISLAMABAD: Pakistan has asked the United States if its sanctions on Iran will impact the much-delayed gas pipeline project, a senior official at the Energy Ministry told The News.

The official said the ministry has informally asked the authorities several times, while the State Minister for Petroleum Musadik Malik has also taken up the matter with US functionaries during his recent US visit.

“While coming back home, he also met US officials in Qatar and agitated the issue if the US sanctions imposed on Iran will impact Pakistan if it goes for IP gas line project,” the official added.

Earlier, Special Assistant to the Prime Minister on Foreign Affairs Syed Tariq Fatemi had also spoken to the US authorities about the issue.

“So far, the US has not responded to this effect,” the official said, adding that Pakistan needs a response from the American government to make the final decision on the very important project.

Pakistani authorities are now optimistic about the project, particularly keeping in view of the new era of friendship between Saudi Arabia and Iran backed by Beijing and new geo-strategic alignments. “In the past, there had also been opposition to the project from the Kingdom of Saudi Arabia.”

In the latest development, Tehran asked Islamabad in January 2023 to construct a portion of the Iran-Pakistan (IP) gas pipeline project in its territory till February-March 2024, or be ready to pay a penalty of $18 billion.

During the visit, Iranian authorities claimed that the US sanctions on Iran were illegal and that Pakistan, under the revised agreement, was bound to build the pipeline by February-March 2024. Iran had already completed part of the pipeline in its own territory from the gas field to the Pakistan border.

Prime Minister Shehbaz Sharif had formed a three-member committee headed by Fatemi on how to advance on the issue given the Iranian warning to move French arbitration against Pakistan.

The committee had proposed to engage Iran on the issue and also to launch diplomatic endeavours with US functionaries on various levels to know the impact of sanctions against Iran on Pakistan in case the project gets commissioned.

The IP gas pipeline project was to be completed by December 2014, and gas flow intake was to start from January 2015 but Pakistan could not initiate the pipeline from the Iranian border to Nawabshah.

The Gas Sales Purchase Agreement (GSPA) was signed in 2009 for 25 years. Almost 13 years have passed since the signing of the agreement, and the three-year construction period for the pipeline in Pakistani territory has been wasted. Under the agreement, Pakistan was supposed to lay down in its territory a 781-kilometre pipeline from the Iranian border to Nawabshah.

Under the original agreement, Pakistan is bound to pay $1 million per day to Iran from January 1, 2015, under the penalty clause. And in case Iran moves an arbitration court, Pakistan would have to pay billions of dollars as a penalty. But in Sept 2019, the Inter State Gas Systems of Pakistan (ISGSP) and the National Iranian Gas Company (NIGC) inked a revised agreement for the construction of the gas pipeline.

Under the revised accord, Iran would not approach any international court if there was a delay in the construction of the pipeline, and neither would Pakistan pay any fine to Iran till 2024.

However, after February-March 2024, Iran would be free to approach arbitration against Pakistan. The Islamic Republic reminded Pakistan about the completion deadline of the project, an official said.

The News broke the story in its edition of January 31, 2023, with the headline “Iran dangles the threat of $18 billion penalty over the pipeline project.” On completion, Pakistan would have an intake of 750 million cubic feet of gas from Iran daily.

In the meeting, the official said, it was decided that diplomatic efforts would also be initiated to convince Iran that Pakistan was quite serious about the project and would persuade the authorities not to seek a penalty in case Pakistan fails to meet the deadline of February-March 2024.

They said the country will be trying to get a waiver or relief from the US on the sanctions imposed on Iran. 

“Now there are only US sanctions left as the UN curbs are no longer there on Iran for its nuclear programme,” the official said. 

“Pakistan is an energy-starved country and it needs relief from the US sanctions so that it can erect the pipeline to ensure sustainable gas availability.”

Iran says the US sanctions are illegal. Experts say sanctions do not bar the construction of the pipeline, but only on gas flows from Iran. India also got a US waiver and has been getting crude oil from Iran since a long time.


Gold rate declines for second consecutive day




  • Rate of gold reaches Rs232,800 per tola. 
  • International rate up by $11 per ounce. 
  • The silver price remains unchanged. 

Despite an increase in the international rate, gold’s value declined in Pakistan for the second consecutive day Tuesday.

Data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed the price of gold (24 carats) decreased by Rs1,700 per tola and Rs1,458 per 10 grams to reach Rs232,800 and Rs199,588, respectively.

The gold rate cumulatively lost Rs1,100 per tola last week, and a further Rs1,700 on the opening day this week.

Meanwhile, the international price went up $11 to settle at $1,956 per ounce. 

The safe-haven bullion’s value has remained volatile in the international market recently. However, it bounced back from its lowest level in over two months Tuesday after the US dollar’s value declined from a high and investors remained anxious about negotiations on the US debt ceiling.

If the debt ceiling — which is currently capped at $31.4 trillion — is not raised in the next few days, it would trigger the first-ever US default.

Investors also remained wary about a possible hike in the interest rate, which would negatively affect gold’s value.

Meanwhile, the gold rate has been volatile in Pakistan recently amid continued political and economic uncertainty, high inflation, and currency depreciation. People prefer to buy the yellow metal in such times as a safe investment and a hedge.

The rupee gained Re0.07 or 0.02% against the US dollar in the interbank market Tuesday, closing at Rs285.35, according to State Bank of Pakistan data.

Data shared by the jeweller’s body showed that the rate of silver remained unchanged at Rs2,850 per tola and Rs2,443.41 per 20 grams, respectively. 

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France launching electric car battery factory to dent Chinese dominance




Under a plan of reindustrialisation by President Emmanuel Macron, France is to inaugurate a factory for manufacturing batteries for electric cars Tuesday in Billy-Berclau — the first of its kind — challenging the Chinese dominance in the industry, according to an AFP report.

Battery industry buildup is a component of the plan by Macron with a clutch of factories set to emerge in the north of the country over the next three years.

The “gigafactory” is owned by Automotive Cells Company, a partnership between French energy giant TotalEnergies, Germany’s Mercedes-Benz and US-European automaker Stellantis, which produces a range of brands including Peugeot, Fiat and Chrysler.

The inauguration will be attended by French Economy Minister Bruno Le Maire and the country’s energy transition and industry ministers along with German and Italian officials.

The heads of Mercedes, Stellantis and TotalEnergies will also be at the event.

The factory is as large as football pitches in which production will commence this summer.

Elected officials and business leaders intend to turn the Hauts-de-France region into “Battery Valley” — the electric car industry’s answer to Silicon Valley.

AESC-Envision — a Sino-Japanese group — is building a plant near the city of Douai which will supply French automaker Renault from early 2025.

French startup Verkor is scheduled to begin production at a facility in Dunkirk from mid-2025 while Taiwan’s ProLogium has also chosen the coastal city for its first European factory, with output to start in 2026.

Competition between US and China

As European Union (EU) has marked a deadline of 2035 to phase out fossil fuel-run cars, the countries are racing to step up the production of batteries and electric vehicles to meet the target of electric vehicles within the deadline.

In recent years, around 50 battery factory projects have been announced in the EU and the French government has set a target of producing two million electric vehicles per year by 2030, as per the economy ministry.

The ministry said that “the ACC plant will supply 500,000 vehicles per year by then.”

China is the world leader in electric car battery production and also dominates the production of the raw materials needed to make them.

Europe also faces stiff competition from the United States, which is heavily subsidising the sector through the Inflation Reduction Act, which includes $370 billion in clean energy incentives.

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Govt mulls slashing duty on mobile phones in budget




ISLAMABAD: The Federal Board of Revenue (FBR) is mulling options to reduce the duty on mobile phones in the federal budget for the fiscal year 2023-24 — which is expected to be unveiled on June 9 — keeping in view the suggestions of Pakistan Mobile Phone Traders, The News reported Monday.

Previously, the government was obliged to raise the duty on mobile phones by 100% to 150%, and resultantly, only Rs5 billion to Rs10 billion were being deposited in the national exchequer instead of Rs85 billion.

The number of mobile phone users in Pakistan has exceeded 186.9 million. 

In order to cope with the financial crisis of the current financial year, in the new budget, a proposal for a conspicuous reduction in the rates of duties on cellular phones is under consideration, which is about 100% to 150% at present on small and big mobile phones. 

The mobile industry is on the brink of collapse due to an increase in taxes. It not only affected traders but also made the life of millions of people difficult to earn a livelihood.

It has been learnt that a delegation of the Mobile Phones Traders Association has given recommendations to Finance Minister Ishaq Dar and other senior officials. 

The delegation ensured that efforts would be made to include the recommendations in the budget. These proposals and recommendations are being reviewed to make them a part of the new budget.

It has been learnt that a 75% duty was imposed on cellular phones in Pakistan as compared to other countries of the region like Singapore, Bangladesh and Turkey where it is not at that level. That is the reason people are using smartphones without paying duties in connivance with FBR.

The additional 100% to 150% duty on cell phones has made it out of reach of the poor, labourers, daily wagers, students, professionals, the lawyer community, and civil society. 

All Pakistan Mobile Phones Traders Association General Secretary Munir Beg Mirza said that due to the ban on the import of used mobile phones, smuggling has increased to give favour to a few companies. 

Also, people are using smartphones illegally without paying heavy taxes to enjoy all functions of smartphones, which is inflicting a loss on the national kitty.

He said that not only every consumer would pay tax but also the government would get Rs100 billion instead of Rs5 billion on phones if an appropriate duty was imposed in the new financial year.

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