2
Refineries margins likely to hike in 3rd quarter current FY ISLAMABAD: The country’s oil refineries will get additional revenue in 3rd quarter of current finance year due to hike in crude oil price in international market. According to the statistical data, the global crude oil prices (Arab light) stable around US$ 110 per barrel an average of 3% gain petroleum prices in 3rd quarter of 2013 is likely to bode well for domestic sector. As per data domestic gross refinery margins (GRMs) which are preliminary gauge of sector’s profitability are like to stand around US$ 3.5 a barrel in the preceding quarter. Statistical data further revealed that during the current quarter international crude oil prices on an average increase by 1% to average at US$ 111 per barrel as compared to last quarter. On the other hand product prices on an average rose in rang of 3-5% rendering into better product margins in 3rd quarter of current fiscal year. It is stated that Petrol (MS) spread to improve by significant US$4 per barrel to US$ 5 per barrel in 3Q 2013 while margins on High Speed Diesel (HSD) are also likely to US$ 2 to US$ 24 per barrel. Furnace oil margins are expected to remain stagnant near negative US$27 per barrel. The other product like kerosene oil estimated to be up by US$3 to US$ 15. Subsequently, refineries gross refinery margins to show a considerable improvement in 3Q13 as compared to 2Q13 and in 3rd quarter of current fiscal year GRMs are likely to remain around US$ 3.5 against margins in last quarter. It is estimated that Attock oil refinery (ATRL) 3Q margin would remain around US$ 5.5 barrel which much higher than estimate that wasUS$3.5 per barrel in 2Q13.on the other hand NRL’s fuel refinery margins are likely to operate on breakeven level which are higher than estimated US$ 1 per barrel in the preceding quarter. However lube margins which are major contributor to company’s earnings continue to go to sluggish period. With outgoing quarter 3Q13 depicting improved GRMs we expect sector to showcase better core-refinery earning as against 2Q FY13. ONLINE 01 ISLAMABAD ONLINE D uE to poor economic conditions transmission and distribution T&D losses in power sector, circular debt in the last five years increased to Rs 711 billion rupees. According to uSAID report for the Causes and Impacts of Power Sector Circular Debt in Pakistan in 2008 circular debt was 161.21 billion rupees that increased to 235.65 billion in 2009. Similarly, circular debt in 2010 increased to Rs 365.66 bil- lion and in 2011 this amount swelled to Rs 537.53 billion. Dur- ing current fiscal year circular debt increased to Rs 872.41 billion. Report revealed that poor revenue col- lection from the distribution companies in 2012 added Rs 86.90 billion into the circular debt while another amount of 72 billion rupees added due to poor recoveries by HESCO, PESCO, SESCO and QESCO. uSAID report further stated that 197 billion rupees are outstanding by private consumers under electricity bills which is major reason of current circular debt. Report said that during fiscal year 2011-12 Peshawar electric supply company limited (PESCO) have to receive 51 billion rupees from its consumers while Hyder- abad electric supply company limited (HESCO) has to receive 44 billion rupees from consumers. Similarly, Quetta electric supply company limited (QESCO)’s liabilities are 48 billion rupees, Lahore electric supply company limited (QESCO) 23 billion rupees and Gujranwala electric supply com- pany limited (GESCO) 5 billion rupees. Faisalabad electric supply company (FESCO) remained failed to collect 7 billion rupees from its consumers and Islamabad electric supply company limited (IESCO) have liabilities of 2 billion with its consumers. uSAID report informed that MEPCO consumers have not paid 14 billion in electricity bills and this amount is major element in circular debt. BuSIneSS B Sunday, 31 March, 2013 Organisations must pay tax returns to ensure their contribution in social sector development. — Javed Jabbar In 2008 circular debt was Rs 161.21b which increased to Rs 235.65b in 2009. In 2010, the circular debt increased to Rs 365.66b and in 2011 this amount swelled to Rs 537.53b. During the current fiscal year, the circular debt has increased to Rs 872.41b LAHORE ONLINE Expressing concerns over slow economic growth and increasing fiscal deficit, the Lahore Chamber of Com- merce and Industry has said that the country’s econ- omy is at a high risk and remains vulnerable to internal and external shocks. In a statement issued on Saturday the LCCI Pres- ident Farooq Iftikhar said that the continuous increase in fiscal deficit will pull country’s economy towards major downturn, which is already in precarious con- dition due to various core issues that need to be ad- dressed on urgent basis.He, however, said that the two main reasons for increase in the deficit is inability to control expenditures and lack of a plan to generate higher revenue in view of severe energy crisis. The LCCI President suggested to the government to lower the interest rates as lowering by a single point saves Rs 100 billion for the government as major chunk of the government borrowing is from domestic means. He further added that loss making Public Sec- tor Enterprises (PSEs) are damaging the economy by Rs 500 billion per annum but government could save RS 200 billion by applying good governance practices in PSEs for the time being. We request the federal government to take prudent decisions without wasting further time in the larger interest of the country. The current account deficit could also be reduced by at least Rs 300 billion by maintaining and regulat- ing public spending and pursuing a sound fiscal pol- icy. Farooq Iftikhar said that fiscal deficit could also be lowered by increasing the government revenue for which effective measures were needed to expand the tax base by bringing all sectors under tax net. He said that there is no doubt that the situation is compounded by an uncertain global environment and a difficult do- mestic situation but it is also extremely important that all economic policies in vogue at the moment be re- viewed afresh in totality. Circular debt swells to Rs 711bn in last five years MULTAN: Women sorting cotton at a local wool factory. INP Pakistan, Tajikistan, Afghanistan expected to sign trilateral transit pact DUSHANBE INP Construction of the railway link connecting Tajikistan, Afghanistan and Turkmenistan as well as implementation of the Central Asia South Asia Electricity Transmission and Trade Project (CASA 1000) were the focus of a meeting of Tajik President Emomali Rahmon with Afghan Foreign Minister Zalmai Rasoul that took place on Friday. According to the Tajik president’s official website, the sides also discussed cooperation between relevant bodies of the two countries for implementation of ambitious regional projects. They reportedly expressed hope that a trilateral trade and transit pact that would be signed between Tajikistan, Afghanistan and Pakistan would pave the way for further expansion of trade and economic cooperation between the nations. President Rahmon noted that Tajikistan was ready to provide assistance to Afghanistan with training of personnel for its railway and other sectors. The sides also discussed regional security and a number of other issues being of mutual interest, the source said. ThE GovErnmEnT shouLd LowEr ThE InTErEsT raTEs as LowErInG by a sInGLE poInT savEs rs 100 bILLIon For ThE GovErnmEnT as maJor Chunk oF ITs borrowInG Is From domEsTIC mEans LCCI chief’s recipe to lower fscal defcit LCCI President Farooq Iftikhar PRO 31-03-2013_Layout 1 3/31/2013 4:36 AM Page 1

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Page 1: profitepaper pakistantoday 31st March, 2013

Refineriesmarginslikely to hikein 3rd quarter current FY ISLAMABAD: The country’s oil

refineries will get additional revenue in

3rd quarter of current finance year due

to hike in crude oil price in

international market. According to the

statistical data, the global crude oil

prices (Arab light) stable around US$

110 per barrel an average of 3% gain

petroleum prices in 3rd quarter of

2013 is likely to bode well for domestic

sector. As per data domestic gross

refinery margins (GRMs) which are

preliminary gauge of sector’s

profitability are like to stand around

US$ 3.5 a barrel in the preceding

quarter. Statistical data further

revealed that during the current

quarter international crude oil prices

on an average increase by 1% to

average at US$ 111 per barrel as

compared to last quarter. On the other

hand product prices on an average

rose in rang of 3-5% rendering into

better product margins in 3rd quarter

of current fiscal year. It is stated that

Petrol (MS) spread to improve by

significant US$4 per barrel to US$ 5

per barrel in 3Q 2013 while margins on

High Speed Diesel (HSD) are also likely

to US$ 2 to US$ 24 per barrel. Furnace

oil margins are expected to remain

stagnant near negative US$27 per

barrel. The other product like kerosene

oil estimated to be up by US$3 to US$

15. Subsequently, refineries gross

refinery margins to show a considerable

improvement in 3Q13 as compared to

2Q13 and in 3rd quarter of current

fiscal year GRMs are likely to remain

around US$ 3.5 against margins in last

quarter. It is estimated that Attock oil

refinery (ATRL) 3Q margin would

remain around US$ 5.5 barrel which

much higher than estimate that

wasUS$3.5 per barrel in 2Q13.on the

other hand NRL’s fuel refinery margins

are likely to operate on breakeven level

which are higher than estimated US$ 1

per barrel in the preceding quarter.

However lube margins which are major

contributor to company’s earnings

continue to go to sluggish period. With

outgoing quarter 3Q13 depicting

improved GRMs we expect sector to

showcase better core-refinery earning

as against 2Q FY13. ONLINE

01

ISLAMABAD

ONLINE

DuE to poor economic conditionstransmission and distributionT&D losses in power sector,circular debt in the lastfive years increased to

Rs 711 billion rupees.According to uSAID report

for the Causes and Impacts ofPower Sector Circular Debt inPakistan in 2008 circular debtwas 161.21 billion rupees thatincreased to 235.65 billion in2009. Similarly, circular debt in2010 increased to Rs 365.66 bil-lion and in 2011 this amountswelled to Rs 537.53 billion. Dur-ing current fiscal year circular debtincreased to Rs 872.41 billion.

Report revealed that poor revenue col-lection from the distribution companies in2012 added Rs 86.90 billion into the circular debtwhile another amount of 72 billion rupees added due topoor recoveries by HESCO, PESCO, SESCO and QESCO.

uSAID report further stated that 197 billion rupees are outstandingby private consumers under electricity bills which is major reason

of current circular debt. Report said that during fiscalyear 2011-12 Peshawar electric supply company

limited (PESCO) have to receive 51 billionrupees from its consumers while Hyder-

abad electric supply company limited(HESCO) has to receive 44 billion

rupees from consumers. Similarly,Quetta electric supply companylimited (QESCO)’s liabilities are48 billion rupees, Lahore electricsupply company limited(QESCO) 23 billion rupees andGujranwala electric supply com-pany limited (GESCO) 5 billionrupees.

Faisalabad electric supplycompany (FESCO) remained

failed to collect 7 billion rupees fromits consumers and Islamabad electric

supply company limited (IESCO) haveliabilities of 2 billion with its consumers.

uSAID report informed that MEPCO consumershave not paid 14 billion in electricity bills and this

amount is major element in circular debt.

buSIneSS

BSunday, 31 March, 2013

Organisations must pay tax returns to ensure their

contribution in social sector development. — Javed Jabbar

In 2008 circular debt was Rs 161.21b which increased to Rs 235.65b in 2009.

In 2010, the circular debtincreased to Rs 365.66b andin 2011 this amount swelled

to Rs 537.53b. During the current fiscal year,

the circular debt has increased to

Rs 872.41b

LAHORE

ONLINE

Expressing concerns over slow economic growth andincreasing fiscal deficit, the Lahore Chamber of Com-merce and Industry has said that the country’s econ-omy is at a high risk and remains vulnerable tointernal and external shocks.

In a statement issued on Saturday the LCCI Pres-

ident Farooq Iftikhar said that the continuous increasein fiscal deficit will pull country’s economy towardsmajor downturn, which is already in precarious con-dition due to various core issues that need to be ad-dressed on urgent basis.He, however, said that the twomain reasons for increase in the deficit is inability tocontrol expenditures and lack of a plan to generatehigher revenue in view of severe energy crisis.

The LCCI President suggested to the government

to lower the interest rates as lowering by a single pointsaves Rs 100 billion for the government as majorchunk of the government borrowing is from domesticmeans. He further added that loss making Public Sec-tor Enterprises (PSEs) are damaging the economy byRs 500 billion per annum but government could saveRS 200 billion by applying good governance practicesin PSEs for the time being. We request the federalgovernment to take prudent decisions without wastingfurther time in the larger interest of the country.

The current account deficit could also be reduced

by at least Rs 300 billion by maintaining and regulat-ing public spending and pursuing a sound fiscal pol-icy. Farooq Iftikhar said that fiscal deficit could alsobe lowered by increasing the government revenue forwhich effective measures were needed to expand thetax base by bringing all sectors under tax net. He saidthat there is no doubt that the situation is compoundedby an uncertain global environment and a difficult do-mestic situation but it is also extremely important thatall economic policies in vogue at the moment be re-viewed afresh in totality.

Circular debt swells to Rs 711bn in last five years

MULTAN: Women

sorting cotton at a local

wool factory. INP

Pakistan, Tajikistan,

Afghanistan expected

to sign trilateral

transit pact

DUSHANBE

INP

Construction of the railway link connectingTajikistan, Afghanistan and Turkmenistan aswell as implementation of the Central AsiaSouth Asia Electricity Transmission and TradeProject (CASA 1000) were the focus of ameeting of Tajik President Emomali Rahmonwith Afghan Foreign Minister Zalmai Rasoulthat took place on Friday. According to theTajik president’s official website, the sides alsodiscussed cooperation between relevant bodiesof the two countries for implementation ofambitious regional projects. They reportedlyexpressed hope that a trilateral trade and transitpact that would be signed between Tajikistan,Afghanistan and Pakistan would pave the wayfor further expansion of trade and economiccooperation between the nations. PresidentRahmon noted that Tajikistan was ready toprovide assistance to Afghanistan with trainingof personnel for its railway and other sectors.The sides also discussed regional security anda number of other issues being of mutualinterest, the source said.

The governmenT shouLd LowerThe InTeresT raTes as LowerIngby a sIngLe poInT saves rs 100bILLIon for The governmenT asmajor Chunk of ITs borrowIngIs from domesTIC means

LCCI chief’s recipe to lower fiscal deficit

LCCI President Farooq Iftikhar

PRO 31-03-2013_Layout 1 3/31/2013 4:36 AM Page 1

Page 2: profitepaper pakistantoday 31st March, 2013

buSIneSSSunday, 31 March, 2013

ACCA recognizesprofessionalsISLAMABAD: ACCA Islamabad held its New

Members Ceremony recently to celebrate the

achievement of 91 new ACCA members from the

north region, who have attained the membership

milestone during the last year. The ceremony

commenced with welcome address, delivered by

Arif Masud Mirza, head of ACCA Pakistan who

welcomed the new members to the ACCA

fraternity and motivated them to continue their

training and development through Continuous

Professional Development for successful career

progression. Later, Noor Aftab, head of ACCA

Islamabad congratulated the new members on

their remarkable success and shared with them

the benefits of professional training and

development required by these new members in

order to excel further in their career. The

ceremony was presided over by key note speakers

Saif Rastgar, Director Operations, Rastgar

Engineering, Saeeda Sabah Rashid, Senior

Financial Management Specialist (SARFM), The

World Bank and Malik Mirza, CFO, U microfinance

Bank and ACCA Pakistan Members Network Panel’s

Chairman. ACCA Islamabad also presented awards

to ACCA’s long standing workplace mentors in

Pakistan including Murtaza Ali, Director Fin

Control, Telenor Pakistan, Iftikhar Chaudhry,

Executive Director, Deloitte Pakistan and Khayyam

Mushir, Partner, Ernst & Young Ford Rhodes Sidat

Hyder. Kamran Rizvi, Director, Navitus conducted

an hour long motivational session for the young

professionals titled ‘Balancing ACT’. The ceremony

was attended by ACCA Members, employers and

learning partners. PRESS RELEASE

Unifoam defeatsAdsell Cricket Team

LAHORE: Unifoam defeated Adsell cricket team by

108 runs in the Corporate Champions League

Cricket Tournament. In 20 overs game, Unifoam

scored 231 runs for the loss of 4 wickets and sets a

high score record in the Corporate Champions

League Cricket Tournament. While chasing, Adsell

score only 123 runs for the loss of 8 wickets. Abbas

Ali of Unifoam received man of the match trophy

for his brilliant knock of 81 runs and two wickets.

Whereas, Unifoam’s Umer Tehzeeb scored 73,

Imtiaz Intezar 27 and Sajjad Ali scored 19 valuable

runs. PRESS RELEASE

CORPORATE CORNER

02

B

Fiscal deficit can be lowered by increasing the government

revenue. — LCCI President Farooq Iftikhar

KARACHI

NNI

FORMER federal information ministerJaved Jabbar has said that corporate or-ganizations have started contribution insocial development which is a good omenbut they need to do more in this regard.

This he said while addressing at the 5th in-ternational summit on CSR 2013 organized byNational Forum for Environment (NFEH) withthe support of united Nations Environment Pro-gram, Karachi Chamber of Commerce & Insti-tute of Cost and Management Accountants ofPakistan, at a local hotel.

Javed Jabbar said that corporate sector giveslot of jobs and also spending on education,health and training of people. CSR should belinked to corporate fiscal responsibility and or-ganizations should file their tax returns, he said.

FPCCI and other big organizations shouldmake a statement that how much money corpo-rate sector is contributing in social develop-ment. A low amount of money is being spent onsocial science research, which should be raised,he stressed. Jabbar said that Zulfikarabad proj-ect has been launched without conducting basicenvironment assessment. We pointed out author-ities but they did not respond positively, headded. “FBR has declared that 300 textile millsare not paying tax returns in due manner. Organ-izations must pay tax returns so as to ensuretheir contribution in social sector development,Javed Jabbar concluded.

Muhammad Haroon Agar, President KCCI,said several organizations are providing foodand other social services to people in Karachi.He said that Pakistan bureaucracy do not wantour economy to grow. He said CSR can be sim-ply defined as achieving commercial success inways that honour ethical values and respect peo-ple, communities, and the natural environment.

It is satisfying to note that over the years, inPakistan, the corporate sector has focused on re-sponsible business practices highlighting sus-tainability, social and environmental issues. Thecompanies have started believing in the welfareof not only its employees but its activities thathave been directed towards safety, environment,education and social welfare and other issues,directly or indirectly having impact on the com-munities and environment.

Ateequr Rehman, KCCI executive commit-tee member, said most of the hospitals let heartand other serious patients to die due to havingno money for costly medical tests and treatment,which is matter of great concern, therefore, cor-porate sector, including hospitals, should adoptsympathetic attitude and providefree treatment to such patientsand save their live as partof their corporate socialresponsibility (CSR).

Dr. A Bari saidthat Indus Hospi-tal is an innova-tive healthcareorganization inthe countrywhich pro-vides treat-ment to thoseserious pa-tients who donot have moneyand do not letthem to die.“Other hospitalsshould also need tofeel their social respon-sibility and save humanlives,” he said.

Dr Kaiser Waheed said that 80percent of companies have started CSR service.He said that local corporations are paying moreattention on CSR, however, there is need to raiseawareness about social responsibility.

Aman-ul-Haq, Manager CSR, Engro Corpo-ration, said that agriculture is the mainstay ofPakistan and Ghotki is one of largest economiccontributing districts. This district has also cre-ated lot of jobs. He stressed that need to supportfarming community rural areas for raising milkproduction.

He said that the farming community hasstarted producing more milk after companiesstarted purchasing milk from them at lucrativerates. This has helped them to raise their earn-ings and generate livelihood with respect. Hesaid that we have trained 20,000 women inSindh for being self-relaint in economy. He alsostressed the need to train farmers for raisingagriculture and dairy productions. There is alsoneed to conduct research on seeds for achieving

more crop production.Earlier, in his address, NFEH Chairman

Naeem Qureshi welcomed the distinguishedguests for participating in the program andurged the need to boost social responsibility inthe organizations.

He appreciated the corporate or-ganizations’ role in the social

development and hoped thatthey would do more as

part of CSR. Two panel dis-

cussions were alsoheld on CSR im-portance in whichcross questionswere raisedabout the prob-lems being facedin this regard.The experts inpenal discussions

stressed the needto raise the CSR

contribution in so-cial development.

Forty five compa-nies were awarded for

playing best role in CSR. Thenames of the companies are:

English Biscuit Manufacturers; EngroPower Gen Qadir Pur; GeII Sapphire ElectricProject; Pak Arab Refinery; Mariam Ali Mo-hammad Tabba Foundation; Change In Educa-tion; Tourism Promotion Services Pakistan;Procter & Gamble Pakistan; Rafhan MaizeProducts; Total Parco Pakistan; Adamjee Insur-ance Company; Fauji Fertilizer Bin Qasim;Fauji Fertilizer Company; Human DevelopmentFoundation; Etihad Airways; Yunus TextileMill; Karachi Electric Supply Company; PepsiCola International; Pak Datacom; Greenwichuniversity; Total Oil Pakistan; M. MuhammadShafi & Co; CRLF Crown Group; NationalBank of Pakistan; Pakistan Petroleum; EngroFoundation; Lotte Pakistan PPTA; Pakistan To-bacco Company; Fatima Fertilzer Company;EFu Life Assurance; Oil & Gas DevelopmentCompany; Sui Southern Gas Company; TameerMicrofinance Bank; Js Bank; Shan Foods; DrEssa Laboratory; Habib Bank; Pharmevo; andAbbott Laboratories Pakistan.

Experts asks organisationsto contribute to socio-economic development

The companies havestarted believing in thewelfare of not only the

employees but theiractivities that have beendirected towards safety,environment, education

and social welfare andother issues, directly or

indirectly having impacton the communities and

environment

Pakistan-Japan Business Forum hostsfarewell for vice chairman

KARACHI: “Though you spoke standing in the midst of Karachi Bloom last night, it was sad for the many

in attendance who came in touch with you to hear that you are to depart after four years of stay in

Pakistan,” this was said by Pakistan Japan Business Forum (PJBF) Secretary General Kalim Farooqui in

honour of PJBF Senior Vice Chairman Nakagwa-San. “You would be missed as your understanding and

cooperation to PJBF as it’s Senior Vice Chairman was commendable,” he added. “Bidding farewell sounds

sad and gloomy and it is for this reason PJBF mentions “PHIR MILENGAY” meaning, we will meet again,” he

said, adding that ss most of the attendees at the party have business with Japan, as you and your

Company do with Pakistan, I am sure there will be occasions where our paths will cross again.” “I am

leaving tonight for an overseas trip which will also take me to Japan where I will be calling on my friends at

Marubeni with whom my relations stretch over three decades,” he added. “As I write this message to you,

two of my staff members are in Myanmar meeting Asayama-san in Napitaw who as he mentions was

stationed with you once in Bangladesh,” he maintained. “Also, your predecessor, Yamamoto-san, also the

Senior Vice Chairman at PJBF during his tenure in Pakistan informs me that he is retiring this month as the

Managing Director of Marubeni Protechs, a subsidiary of Marubeni Corporation,” he said. PRESS RELEASE

pakistani mangoexporters urgedto explore japanmarketsTOKYO: Stressing the need for jacking up exports of fruits,Ambassador of Pakistan to Japan, Farukh Amil, said thatPakistani mangoes with their irresistible taste would certainlyattract the Japanese market. Speaking to a delegation of SindhMango Growers from Pakistan and the Japanese importershere, he hoped that Pakistani mangoes would be marketed inJapan, meeting all the Japanese standards, this year. He saidPakistan produces very high quality world-class fruits andvegetables, which are excellent in taste. He said despite a hugeagriculture market in Japan, Pakistani products are largelyabsent which calls for unhindered efforts on the part ofPakistani exporters to find ways and means to increase andsustain exports in the world markets. The Ambassadorreiterated the three Ps i.e. preservation, packaging andpresentation for marketing the products in Japan or elsewherein the world. He urged the delegation to meet the Japanesestandards of packaging. He assured the Pakistani businessmenand Japanese importers of the Embassy’s full assistance inmarketing the mangoes and other fruits and vegetables toJapan. Earlier, Mahmood Nawaz Shah on behalf of the visitingdelegation gave a briefing about the quality and exportpotential of Pakistani mangoes to the world market in generaland Japan in particular. He informed that Pakistani mangoeswere being successfully exported to the Middle East andEurope. He hoped that the Pakistani mangoes would find agood market in Japan. Earlier the delegation, guided by DrTalat Imtiaz, held meetings at the Ministry of Agriculture,Forestry and Fishery and Narita Airport Quarantine Authorities.The delegation also visited fresh fruit vegetables farms and thefamous Tokyo Metropolitan Ohta Fresh Market. The delegationis scheduled to visit a host of other agricultural farms andorchards in different parts of Kansai region. INP

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