Govt approves 6% hike in defence budget

The government had approved an increase of 6% in defence budget for the outgoing fiscal year.

Rs1.45 trillion budget will meet the needs of the armed forces, including their enhanced salary requirements.

The decision to increase the defence budget by another Rs80 billion was taken by the Economic Coordination Committee (ECC) of the Cabinet that in total approved Rs182 billion in supplementary grants.

The ECC also approved slapping a 10% regulatory duty on the import of petrol from China to curb the misuse of bilateral free trade agreement. Some oil marketing firms rerouted their imports through China to evade 10% customs duties.

The Ministry of Defence had demanded an additional Rs80 billion defence budget for “critical shortfalls” in addition to making adjustments in the budget for spending on the Jinnah Naval base, the Naval Base Turbat and multi-functional office building in the headquarters.

Federal Minister for Finance Miftah Ismail presided over the ECC meeting that approved Rs80 billion supplementary budget for the armed forces or to the extent of the actual additional expenditures being incurred. The finance ministry was of the view that the additional spending in fiscal year 2021-22 ending on June 30 will be less than Rs80 billion.

For the outgoing fiscal year, the National Assembly had last year approved a Rs1.373 trillion defence budget. With the raise in the spending ceiling, the next fiscal year’s defence budget may also now be higher than the earlier estimated figure of over Rs1.55 trillion.

In total, the Ministry of Defence got Rs153 billion or 11.8% additional money in this fiscal year over the revised budget of the previous year, which is equal to the average inflation rate in Pakistan. The defence spending will be equal to 2.2% of the Gross Domestic Product, excluding expenditures on the armed forces development programme.

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Government jacks up gas prices by 45%

Oil and Gas Regulatory Authority (OGRA) has approved an increase in gas prices just a day after a massive increase in the price of petroleum products.

The decision was made in a bid to reach a staff-level agreement with the International Monetary Fund (IMF).

Based on the Determination of Estimated Revenue Requirement (DERR) for the financial year 2022-23, a 45% increase has been approved for the Sui Northern Gas Pipelines Limited (SNGPL)while for Sui Southern Gas Company (SSGC) a 44% hike has been notified. The new prices will be effective from July 1.

After approving an increase of Rs266.58 per MMBTU the price of gas has now been fixed at Rs854.52 per MMBTU for the SNGPL consumers, a notification issued in this regard revealed.

“While for SSGC consumers, the price of gas has been fixed at Rs1,007.82 per MMBTU after an increase of Rs308.53 per MMBTU,” the notification read.

The regulatory authority also mentioned that the financial impact of previous years’ shortfall worth Rs264,894 million i.e. Rs720.20 per MMBTU has been referred to the federal government for an appropriate policy decision and is, therefore, not made part of the instant determination.

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Government jacks up gas prices by 45%

Oil and Gas Regulatory Authority (OGRA) has approved an increase in gas prices just a day after a massive increase in the price of petroleum products.

The decision was made in a bid to reach a staff-level agreement with the International Monetary Fund (IMF).

Based on the Determination of Estimated Revenue Requirement (DERR) for the financial year 2022-23, a 45% increase has been approved for the Sui Northern Gas Pipelines Limited (SNGPL)while for Sui Southern Gas Company (SSGC) a 44% hike has been notified. The new prices will be effective from July 1.

After approving an increase of Rs266.58 per MMBTU the price of gas has now been fixed at Rs854.52 per MMBTU for the SNGPL consumers, a notification issued in this regard revealed.

“While for SSGC consumers, the price of gas has been fixed at Rs1,007.82 per MMBTU after an increase of Rs308.53 per MMBTU,” the notification read.

The regulatory authority also mentioned that the financial impact of previous years’ shortfall worth Rs264,894 million i.e. Rs720.20 per MMBTU has been referred to the federal government for an appropriate policy decision and is, therefore, not made part of the instant determination.

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PM to appear before court in money laundering case today

Prime Minister Shehbaz Sharif and his Chief Minister Punjab Hamza Shehbaz will appear before a special court in Lahore today (Saturday) in the Rs16 billion money laundering case filed against them.

Hamza’s counsel will present arguments for the confirmation of bail in the case filed against him and his family by the Federal Investigation Agency (FIA).

It is worth mentioning that the court had extended the interim bail of PM Shehbaz and Hamza till June 4 (today) on the last hearing and had directed Hamza's lawyer to present his arguments today.

During the last hearing, the court took notice incomplete challan and ordered the prosecution to file a supplementary challan, completing all the requirements.

Meanwhile, PM Shehbaz and CM Hamza will also appear in an accountability court for a hearing of the Ashiyana Housing reference, in which the premier has already been indicted.

Strict security arrangements have been made around the courts ahead of PM's arrival.

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PM to appear before court in money laundering case today

Prime Minister Shehbaz Sharif and his Chief Minister Punjab Hamza Shehbaz will appear before a special court in Lahore today (Saturday) in the Rs16 billion money laundering case filed against them.

Hamza’s counsel will present arguments for the confirmation of bail in the case filed against him and his family by the Federal Investigation Agency (FIA).

It is worth mentioning that the court had extended the interim bail of PM Shehbaz and Hamza till June 4 (today) on the last hearing and had directed Hamza's lawyer to present his arguments today.

During the last hearing, the court took notice incomplete challan and ordered the prosecution to file a supplementary challan, completing all the requirements.

Meanwhile, PM Shehbaz and CM Hamza will also appear in an accountability court for a hearing of the Ashiyana Housing reference, in which the premier has already been indicted.

Strict security arrangements have been made around the courts ahead of PM's arrival.

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PM Shehbaz arrives in Quetta on day-long visit

Prime Minister Shehbaz Sharif has arrived in Quetta on a day-long visit to Quetta and Gwadar.

Chief Minister Balochistan Abdul Qudoos Bizenjo welcomed the Prime Minister on his arrival.

During the visit, the Prime Minister will inaugurate Gwadar East Bay Expressway and will also take an aerial view of the Gwadar Port.

Later, the Prime Minister will address local notables and fishermen and talk to newsmen after meeting delegation of Chinese companies.

He will attend passing out ceremony of Staff College, Quetta as chief guest.

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Trade deficit crosses $43.33b in outgoing fiscal year

Data acquired from Pakistan Bureau of Statistics (PBS) has revealed that Pakistan’s trade deficit crossed $43 billion in the first 11 months (July-May) of the outgoing fiscal year 2021-22, as the pace of increase in imports was more than the surge in exports due to the sky-high oil import bill.

Analysts fear that a record-high trade deficit may worsen the country’s current account balance and further weaken the rupee. They identified higher crude, petroleum products, edible oil, and other commodities prices in the international market as reasons behind the widening trade balance.

They further mentioned that growth in exports was reasonably good during the year, but it still has far less potential to reduce trade imbalances.

The first 11 months of the outgoing fiscal year witnessed a deficit of $15.88 billion or 57.85% higher than the $27.45 billion the economy racked up in the same period a year ago.

Imports surged to a whopping $72.18 billion while exports were at $28.848 billion in the July-May period. The imports were 60% more than exports, the PBS reported. In the same period last fiscal, imports were at $50 billion and exports at $22.576 billion. This depicts a 27.8% growth in exports and a 44.3% increase in imports.

Goods exports in May 2022 picked up 55.66% to $2.6 billion from $1.67 billion in the corresponding month a year ago, while imports rose by 25.4% to $6.64 billion from $5.297 billion in May 2021. The trade deficit in May 2022 swelled 11.5% to $4.04 billion from $3.63 billion in the same month a year ago.

Comparing trade performance with the previous month, goods exports in May 2022 were down 10.2% from $2.897 billion in April 2022. Imports during May 2022 were down by half a per cent from $6.679 billion in April 2022.

Amid the country’s external financing imbalance, the rupee devaluation did not significantly help boost exports.

It is worth mentioning that during the last fiscal year (2020-21) trade deficit stood at $31.1 billion or 34.3% higher than the $23.159 billion recorded in the fiscal year 2019-20. In FY21, imports clocked in at $56.405 billion and exports $25.30 billion.

During FY20, the exports hit $21.39 billion, while imports came in at $44.55 billion, a deficit of $23.159 billion.

The PBS also reported the services trade statistics for the first ten-month period (July-April 2021-22). During the period, the local companies hired more services from other countries than they provided to them.

The services trade deficit increased 71% to $3.58 billion in the period under review from $2.1 billion in the same period of FY21. The economy hired foreign companies’ services for $9.37 billion while selling its services abroad for $5.79 billion. In the same period of FY20, the services exports (money inflow) stood at $4.9 billion, and imports (outflow) were recorded at $6.99 billion. This represents an increase of 18.2% in exports and 34% in imports of services.

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