KARACHI: It is the government’s job to present a rosy picture of the economy. After all, no political party would admit that the economic structure has weakened, numbers are disappointing, and that no real progress has been made during its tenure.

But there are some claims that are verifiable. For example, the government last week stated that petroleum products in Pakistan were the cheapest in the region. The claim, which surprised many given the high amount of tax rates levied on petrol and diesel, was found to be quite the exaggeration.

The price of diesel, which has a huge impact on the local economy given its massive consumption in commercial and industrial output, is second-highest in Pakistan, after India, in the region.

When it comes to petrol, Afghanistan remains the cheapest, according to globalpetrolprice.com, a renowned website.

The website, which tracks the prices of petroleum products in 150 countries and publishes them on a weekly basis, reports that diesel was priced at $0.87 for a litre in Pakistan as on February 12, which makes it the second-most costly country for the fuel after India ($1.03 per litre) in the South Asian region.

Other regional economies, including Sri Lanka, Nepal, Bangladesh, Bhutan and Afghanistan are selling the industrial fuel at a comparatively lower price than Pakistan is. The website did not publish the fuel oil price in the Maldives.

Additionally, Pakistan sells petrol (motor spirit) for $0.76 per litre to its masses (mostly to motorcyclists and car drivers), which is the second-cheapest – not the cheapest – in the region after Afghanistan, which ironically depends on Pakistan for its imports. Kabul has priced it at $0.65 to the litre.

Price of the fuel remains comparatively high in other regional countries, according to the website.

South Asia remains a net importer of oil. Almost all regional countries import heavily to meet commercial, industrial and transportation needs. Pakistan, for example, meets 70% of its total consumption through imports. The rest is met through local production.

Since all countries are net importers – which means they are price followers – the difference in prices is due to the levy of taxes at the retail level, and provision of subsidy the government keeps to control inflation.

Pakistan, as per the report the petroleum ministry submitted in the National Assembly last week, is charging high tax rates on diesel and petrol to meet its revenue target and smoothly run affairs. The country does suffer from low tax collection and taps on indirect taxes to shore up its collection.

Local prices and tax
breakdown

Pakistan sells diesel at Rs95.83 ($0.87) per litre at the retail level. This includes Rs40.74 in taxes, which comes to 42.5% of the retail price. Similarly, it collects 40.5% (Rs34.24 per litre) tax on petrol priced at Rs84.51 ($0.76) in retail.

The government keeps adjusting these rates as it looks to strike a balance between controlling inflation, its vote bank, and meeting revenue targets.

For example, tax rates were adjusted (increased) to keep the revenue stream going even as the price of oil collapsed in the international market in January 2016. The price of Brent crude plunged to around $35 a barrel from around $140 in 2008, but the effect in Pakistan wasn’t as profound. Brent stood at $64.5 on Friday.

With wild fluctuations in the international price, the government has looked to increase tax rates, denying the full impact of the low price in order to keep its collection at the original budgeted estimates.

All Pakistan Textile Mills Association’s (APTMA) Chairman Aamir Fayyaz Sheikh the other day said that the country has become uncompetitive in textile exports due to the energy tariff, which is significantly higher when compared to rates in competing nations such as Bangladesh, India and China.

“Energy price for yarn manufacturers in Pakistan is almost double than that in competing nations,” he said.

Many competitors, including Bangladesh and China, provide subsidy on energy to their industrial sectors to remain competitive.

In Pakistan, however, high rates of taxes have taken toll on inflation readings as well, increasing its pace and pushing back interest rates northwards. If the trend continues, the days of increasing economic growth may be over.

The writer is a staff correspondent

PESHAWAR: At least five people died and three others were injured in the rain and snow-related incidents across Khyber-Pakhtunkhwa over the past two days.

Heavy rains and snow began on Sunday night across the province which continued on Tuesday. The snow had also stranded tourists in the hilly Hazara Division where roads were blocked in the Galiyat area.

In Mardan, a one-year-old boy died while his parents were injured on Monday evening when the roof of their house in Bageecha area of Shahbaz Garhi caved in, the Provincial Disaster Management Authority said. The dead and injured were rushed to the MMC hospital in Mardan for treatment.
The toddler was identified as Husnain.

Meanwhile, the roof of another house caved in, in Peshawar’s Lal Kurti area. According to rescue 1122, 55-year-old Abdul Jamil and his eight-year-old son Umar. The boy’s mother was injured and had been rushed to the CMH for treatment.

In Lower Dir, the roof of a house collapsed due to heavy rain. The falling debris killed a woman and her daughter. Traffic in the city remained quite slow where because of construction on the BRT. Pools of rainwater around the construction site made it almost impossible for people to walk.

In Chitral, the Lowari Tunnel was closed down because of excessive snowfall on both sides of the tunnel while the authorities feared an avalanche.

KARACHI ‘: After removing Farooq Sattar as its convener a day earlier, the Rabita Committee on Monday requested the Election Commission of Pakistan (ECP) to appoint Khalid Maqbool Siddiqui as the party chief.

“Vide the minutes of the meeting of Rabita Committee held on February 11 at Bahadurabad, Sattar has been removed as convener. In his place Khalid Maqbool Siddiqui has been elected by two-thirds majority,” said an application written by deputy convenor Kanwar Naveed Jamil, bearing signatures of 26 of the total 35 Rabita Committee members.

A senior ECP official confirmed to The Express Tribune that the Rabita Committee’s plea for a new convener has been accepted and Siddiqui will replace Sattar. “We have not yet issued a notice, but Siddiqui will head the party.”

Muttahida Qaumi Movement-Pakistan (MOM-P) nominee for Senate election Barrister Farogh Naseem said that the party was not registered with Sattar, but he was its head.

“The Rabita Committee has removed Sattar with two-thirds majority. He is no longer the party head,” Barrister Naseem said, adding that Bahadurabad was the office of MQM-P and no one could claim it.

Responding to a question, he said, “The Rabita Committee has the authority to make such decisions under MQM-P’s constitution. It has also nominated candidates for the Senate election. Sattar can challenge it in court if he has any reservations over it.”

The general workers’ meeting convened by Sattar holds no legal or moral value as the Rabita Committee has removed him, he added.

When the Rabita Committee removed Sattar as convener, Sattar dissolved the committee in retaliation during a public meeting at KMC ground on Sunday night. He announced to hold intra-party elections on February 17 to elect a new body.

ISLAMABAD: The government is likely to allow two major oil marketing companies (OMCs) – Pakistan State Oil (PSO) and Shell Pakistan – to recover two-year-old claims of Rs482 million on account of regulatory duty on petrol and high-speed diesel.

This will put an additional burden on consumers already reeling from gradually rising petroleum product prices.

According to an official, the Federal Board of Revenue (FBR) has supported the recovery plan, but suggests that other OMCs should not be given the go-ahead if they come up with any such claim.
“The impact of these old claims from PSO and Shell will reflect in the monthly revision in petroleum product prices for the consumers, who will bear this additional burden,” the official said.

The duty claims have remained unresolved since May 2015 and now the government is planning to compensate the two OMCs.

The Ministry of Energy (Petroleum Division) has sought approval of the Economic Coordination Committee (ECC) for duty collection through adjustments in petroleum prices.

The FBR had imposed 2.5% regulatory duty on imports of high-speed diesel and 2% on petrol and crude oil on April 30, 2015. After the issuance of a notification in that regard, PSO and Shell paid the duty but they could not recover it from the consumers for May 2015.

A senior official of the Oil and Gas Regulatory Authority (Ogra) told The Express Tribune that the regulator had estimated net duty claims of Rs482 million which included Rs356 million for PSO and Rs125 million for Shell.

“PSO and Shell have shared details of the regulatory duty paid by them and request that they should be allowed to recover the arrears,” he said.

The Ministry of Finance, Planning Commission, FBR and Ogra have backed the proposal that says the two OMCs should be allowed to recover arrears of the regulatory duty from the consumers.

However, the FBR suggested that other OMCs should not be permitted to recover the duty and in case the levy is withdrawn or reduced, its benefit should be passed on to the consumers.

The regulator emphasised that notifications regarding the duty on petroleum products should be issued on time in order to avoid such complications in the future.

ISLAMABAD: The International Court of Justice (ICJ) has given new timeline to both Pakistan and India for filing another round of memorials in the case of convicted Indian spy Kulbhushan Jadhav, sources have revealed to The Express Tribune.

Sources revealed that the ICJ has set April 17 for India to file another memorial, while Pakistan will have to submit a counter memorial by July 17.

In view of the timeline, they also informed that there is little chance that the hearing of the case will resume in 2018, adding that the two-month summer vacations of ICJ judges will start in August, and when it ended, the court will take up cases that have already been fixed before it.
Earlier, New Delhi sought time to file an additional memorial at the ICJ. Legal experts are, however, wondering why India is trying to unnecessarily drag the matter.

While submitting a 1,700-page counter memorial in the ICJ on December 13 last year, Pakistan rejected the Indian objection of not giving consular access to Jadhav, saying the provision of such access under the Vienna Convention is only for legitimate visitors, and not spies.

Pakistan said that since India did not deny that Jadhav was travelling with an assumed Muslim name, they have no case to plead.

India has repeatedly sought consular access to Jadhav, but Pakistan has turned down its requests, citing a bilateral accord that does not permit such access to spies.

However, on December 25, Islamabad allowed Jadhav’s mother and wife to meet with him on purely humanitarian grounds.

It was learnt that the government has also sought legal assistance from two top lawyers of the country. The initial memorial was drafted by Khawar Qureshi.

According to sources, Pakistan stated in the memorial that India did not explain how a serving naval commander, operating under India’s spy agency – Research and Analysis Wing (RAW) – was travelling under an assumed name. This leads to only one conclusion, that India seeks consular access to the information he [Jadhav] had gathered, it added.

It said since Jadhav was on active duty, it is obvious that he was a spy sent on a special mission.

“Only a state that adheres to legitimate actions can request the court to intervene in a matter between two states. A state which does not come with clean hands cannot get any relief,” Pakistan contended.

Pakistan further said that sending Jadhav for espionage and funding terrorist activities were some of the reasons that disentitle India from invoking jurisdiction of the ICJ.

Sources said Pakistan also highlighted constant violations of human rights by India in occupied Kashmir. It said India is a habitual violator of human rights and has not honoured the UN resolutions on Kashmir.

“Giving false identity to Kulbhushan, sending him for espionage and funding of terrorists activities are all some of the reasons which disentitle India from invoking the jurisdiction of the ICJ,” said the counter memorial according to a source. The ICJ will decide the schedule of hearing within 15 days.

On September 13 last year, India submitted a 22-page memorandum wherein it objected to Jadhav being tried by a military court in Pakistan.

The sources said India contended that Jadhav’s trial should have been conducted by a civilian court and that Pakistan was bound to give him consular access.

The federal government has already appointed former chief justice Tassaduq Hussain Jillani as an ad hoc judge for the case at The Hague.

Legal experts are urging all stakeholders to increase coordination in devising the final draft of the memorandum.

The ICJ on May 18 last year halted the execution of Jadhav, who was sentenced to death by a military court on April 10 after being convicted on charges of terrorism and espionage.

Jadhav alias Hussain Mubarak Patel was apprehended on March 3, 2016, after he illegally crossed into Pakistan via Iran border.