Pakistan faces furnace oil glut of 632,000 tons

Pakistan faces furnace oil (FO) glut of 632,000 tons following refusal of power plants to stockpile the fuel and poor export feasibility due to its low price in the global market.

The FO stocks have been accumulating since the start of last winter when power demand shrunk. Power plants are still not lifting furnace oil as electricity generation is mainly coming from hydel and nuclear sources, which have cut the demand of fuel oil for power generation.

The attempts by refineries to export furnace oil did not prove lucrative because of low price. Refineries determined it was financially unviable to export FO, as it could eat up their profits if the fuel was exported in the international market at a low price.

According to the sources in the oil sector, total 632,000 FO stocks include 539,080 tons of useable stocks and 93,147 tons of dead stocks.

Pakistan’s oil marketing companies (OMCS) currently hold 203,879 tons of furnace oil stocks, which is 32% of total stocks. The country’s power sector holds 202,280 tons of the fuel oil stocks with it, which is 33%, while local refineries have 220,068 tons, which is 35% of the total stocks.

The breakup of FO with the local refineries shows that PARCO holds 116,004 tons, National Refinery Limited has 32,327 tons and Pakistan Refinery 44,455 tons, Attock Refinery 16,826 tons, and Cnergyico has 10,457 tons of FO stocks.

The present FO stock is huge and is making the operations of local refineries vulnerable because it has been interrupting their operational capacity. They said that if the FO stocks were not lifting, it could further lead towards a shutdown of refineries’ operations.

On exporting the FO, industry people said that PARCO exported 60,000 tons and PRL exported 25,000 tons but the export price was not lucrative. The price in the global market is on the lower side and it can cause financial issues for the refineries if the stocks are exported at this price.

The situation is not attractive for the local refineries as power generation from FO in the month of February slumped by 80% compared to the same month of last year and in the first eight months of the current fiscal. Electricity production from FO also decreased by 50% compared to the same period of the last financial year.

 

China spent US$240 billion bailing out ‘Belt & Road’ countries

According to a Reuters report, China spent US$240 billion bailing out 22 developing countries between 2008 and 2021, with the amount soaring in recent years as more have struggled to repay loans spent building "Belt & Road" infrastructure.

Almost 80% of the rescue lending was made between 2016 and 2021, mainly to middle-income countries including Argentina, Mongolia and Pakistan, according to the report by researchers from the World Bank, Harvard Kennedy School, AidData and the Kiel Institute for the World Economy.

China has lent hundreds of billions of dollars to build infrastructure in developing countries, but lending has tailed off since 2016 as many projects have failed to pay the expected financial dividends.

"Beijing is ultimately trying to rescue its own banks. That's why it has gotten into the risky business of international bailout lending," said Carmen Reinhart, a former World Bank chief economist and one of the study's authors.

Chinese loans to countries in debt distress soared from less than 5% of its overseas lending portfolio in 2010 to 60% in 2022, the study found.

Argentina received the most, with US$111.8 billion, followed Pakistan on US$48.5 billion and Egypt with US$15.6 billion. Nine countries received less than US$1 billion.

People's Bank of China (PBOC) swap lines accounted for US$170 billion of the rescue financing, including in Suriname, Sri Lanka and Egypt.

Bridge loans or balance of payments support by Chinese state-owned banks was US$70 billion. Rollovers of both kinds of loan were US$140 billion.

The study was critical of some central banks potentially using the PBOC swap lines to artificially pump up their foreign exchange reserve figures.

China's rescue lending is "opaque and uncoordinated," said Brad Parks, one of the report's authors, and director of AidData, a research lab at William & Mary College in the United States.

The bailout loans are mainly concentrated in the middle income countries that make up four-fifths of its lending, due to the risk they pose to Chinese banks' balance sheets, whereas low income countries are offered grace periods and maturity extensions, the report said.

China is negotiating debt restructurings with countries including Zambia, Ghana and Sri Lanka and has been criticized for holding up the processes.

In response, it has called on the World Bank and International Monetary Fund to also offer debt relief.

 

 

Humza Yousaf to be Scotland’s next leader

Scottish nationalists picked Humza Yousaf to be the country's next leader on Monday after a bitterly fought contest that exposed deep divisions in his party over policy and a stalled independence campaign.

The 37-year-old practicing Muslim succeeds Nicola Sturgeon as leader of the governing Scottish National Party (SNP) and will take over as head of the semi-autonomous government once he wins an approval vote in the Scottish parliament.

Setting out his goals, Yousaf said he would concentrate on tackling the cost of living crisis, ending the divisions in the party, and making a renewed push for independence.

"The people of Scotland need independence now, more than ever before and we will be the generation that delivers independence," he said in a speech in Edinburgh after the results were announced.

Yousaf's victory was confirmed at the country's national rugby ground after a six-week campaign where the three candidates spent much of the contest criticizing each other's record in a series of personal attacks.

The SNP's unity, which had been one of its strengths, broke down over arguments about how to achieve a second independence referendum and the best way to introduce social reforms such as transgender rights.

Yousaf takes over a party with an overriding objective to end Scotland's three-centuries-long union with England. His predecessor stepped down after the British government repeatedly blocked a route to a new vote on independence.

While about four in 10 Scots support independence, according to a poll this month, the departure of Sturgeon - a charismatic and commanding leader - may initially slow some of the momentum behind a breakup of the United Kingdom.

The often bad-tempered leadership contest has relieved some pressure on British Prime Minister Rishi Sunak, who is dealing with divisions in his own party, waves of industrial action and high levels of inflation.

Yousaf won 52% of the vote of SNP members in the second round of counting, beating Kate Forbes, the finance secretary, who got 48%. Ash Regan, who had quit the government because of her opposition to proposed changes to gender recognition, was eliminated in the first round of counting.

Coree Brown Swan, a lecturer in politics at Queen's University Belfast, said it would be difficult for the party to unite after a divisive leadership contest.

"It's a broad church of a party, which incorporates lots of different ideologies and opinions on things beyond independence," she said. "How do you get everyone moving in the same direction again?"

The frontrunner to replace Sturgeon, Yousaf has stressed continuity with her record, including her push to make it easier for transgender people to gain official recognition to change their gender.

Yousaf has spoken of the need to focus on building the case for independence and achieving consistent support for the movement, adding that he was open minded on which process to pursue once that level of support was achieved.

He pointed to his own background - born in Glasgow, with a father from Pakistan and mother from Kenya - and views as examples of the inclusive, socially liberal and multi-ethnic Scotland that the SNP has promoted.

During the campaign, Yousaf appeared more relaxed than Forbes, a member of the Free Church of Scotland, in balancing his religious views with the party's socially progressive policies.

While Forbes faced criticism when she announced her opposition to same-sex marriage, Yousaf said he supports it. In 2016, Yousaf took his oath of allegiance in the Scottish parliament in Urdu while wearing a kilt, and he has referred to himself as coming from a "bhangra and bagpipes" heritage.

Yousaf also said during the campaign an independent Scotland should look at ditching the British monarchy.

Scotland voted against independence by 55% to 45% in 2014. Britain's vote to leave the EU two years later when most Scots wanted to stay, and Scotland's handling of the coronavirus pandemic, brought new support for independence.

However, an opinion poll this month showed the backing for independence dropped to 39% or 46% when 'don't know' are excluded. That compares with a record 58% in 2020.

Yousaf will be sworn in as Scotland's leader on Wednesday if he wins a vote in the country's parliament the day before.

"The key to getting independence is ensuring we have that consistent majority support," he said. "If we have that, the political obstacles that are put in our way by Westminster will disappear."

 

Largest strike brings Germany to a standstill

Airports, bus and train stations across Germany were at a standstill on Monday morning, causing disruption for millions at the start of the working week during one of the largest walkouts in decades as Europe's biggest economy reels from inflation.

The 24-hour strikes called by the Verdi trade union and railway and transport union EVG were the latest in months of industrial action which has hit major European economies as higher food and energy prices dent living standards.

Two of Germany's largest airports, Munich and Frankfurt, suspended flights, while long-distance rail services were cancelled by rail operator Deutsche Bahn. Striking workers wearing red high-visibility jackets blew horns and whistles through an empty Munich train station.

Employees are pressing for higher wages to blunt the effects of inflation which reached 9.3% in February.

Germany, which was heavily dependent on Russia for gas before the war in Ukraine, has been particularly hard hit by higher prices as it scrambled for new energy sources, with inflation rates exceeding the euro-area average in recent months.

Persistent cost pressures have pushed central banks to a series of interest rate increases, though policymakers have said it is too early to talk of a price-wage spiral.

Verdi union is negotiating on behalf of around 2.5 million employees in the public sector, including in public transport and at airports, while railway and transport union EVG negotiates for around 230,000 employees at railway operator Deutsche Bahn and bus companies.

In the hours running up to the strike, both sides dug in their heels, with union bosses warning that considerable pay hikes were a matter of survival for thousands of workers.

"Millions of passengers who depend on buses and trains are suffering from this excessive, exaggerated strike," a Deutsche Bahn spokesperson said on Monday.

Verdi is demanding a 10.5% wage increase, which would see pay rising by at least 500 euros (US$538) per month, while EVG is asking for a 12% raise or at least 650 euros per month.

Stranded passengers expressed both sympathy and unhappiness about the strike action.

"Yes, it’s justified but I for one never went on strike in my entire life and I have been working for more than 40 years. At the same time, in France they go on strike all the time about something," said passenger Lars Boehm.

EVG chairman Martin Burkert told the Augsburger Allgemeine newspaper on Monday that employers had not yet made a viable offer and warned that further strikes were possible, including over the Easter holiday period.

Deutsche Bahn on Sunday said the strike was completely excessive, groundless and unnecessary, and employers are warning that higher wages for transport workers would result in higher fares and taxes to make up the difference.

Monday's walkouts are part of waves of disruptive labour strikes in wealthy European countries in recent months including in France and Britain, where hundreds of thousands of transport, health and education workers are pressing for higher wages.

Protests against President Emmanuel Macron's pension reforms have sparked the worst street violence in years in France.

Commerzbank Chief Economist Joerg Kraemer said the economic impact of Monday's strike was limited so far but this could change if the strikes persisted over a longer time.

"The strike will strain people's nerves," he said. "But economically, the losses are likely to be limited to the transportation industry because factories will continue to operate and many employees will be working from home."

The head of the Bundesbank Joachim Nagel said last week Germany needed to avoid a price-wage spiral.

"To be clear, preventing inflation to become persistent via the labour market requires that employees accept sensible wage gains and that firms accept sensible profit margins," he said.

"Despite signs of second-round effects, we have not observed a destabilizing price-wage spiral in Germany so far."

Bangladesh inaugurates submarine base

Prime Minister Sheikh Hasina on Monday inaugurated Bangladesh’s first submarine base near Kutubdia Island, Cox’s Bazar, via a video conference from the capital.

The US$1.21 billion (127 billion taka) base serves as home port for two refurbished Chinese submarines purchased in 2016 to enhance Bangladesh’s naval capacity, after the demarcation of its maritime boundary with.

“We do not want war with anyone. But we must be prepared to give a befitting response if anyone attacks us,” Hasina said in an online message to naval officials gathered at the new base, BNS Sheikh Hasina, in Pekua, about 322 km (200 miles) southeast of Dhaka.

“I believe, by building the base, BNS Sheikh Hasina, Bangladesh Navy’s capacity to protect its maritime boundary is further enhanced,” she said, according to a transcript of her remarks.

The prime minister said that since she assumed power again in 2009, her government had added 31 warships including four frigates, six corvettes, four large patrol craft and five diesel-powered craft.

In November 2016, Bangladesh paid the Chinese government US$205 million (21.5 billion taka) for the submarines, named Nabojatra (New Journey) and Joyjatra (Victory March). Hasina commissioned them on March 12, 2017.

That same day, she laid the foundation stone for the base in Pekua near the Kutubdia channel in the Bay of Bengal. During its construction, the submarines were housed at a naval base in Chittagong.

At the time they were commissioned, Bangladesh’s military communications unit described the submarines as conventional diesel-electric powered craft, 76 meters long and 7.6 meters wide. It said the submarines could reach a maximum speed of 17 nautical miles per hour.

The statement said they were fitted with torpedoes and mines and would be capable of attacking enemy ships and submarines.

“The Chinese will help us build the base and impart training to our personnel to operate the submarines and base. The Chinese submarines will not come here. The base is for our submarines,” Faruk Khan, chairman of the parliamentary committee on foreign affairs, told BenarNews in 2019.

Retired Maj. Gen. Abdur Rashid, a defense analyst, said the base would enhance the capacity of the Bangladesh Navy to protect the vast sea region.

“Given the growing importance of the Bay of Bengal, Bangladesh must enhance the capacity of its navy to protect its sovereignty and thwart all security challenges and non-traditional security threats,” Rashid told BenarNews.

“Bangladesh procures weapons and military hardware from China as the United States and other countries usually do not sell those to us,” he said.

“The launching of the submarine base will definitely enhance our maritime power,” he added.

 

National Iranian Drilling Company digs 99 wells

National Iranian Drilling Company (NIDC) dug and completed the digging operation of 99 oil and gas wells during the past Iranian calendar year 1401 (ended on March 20), an official with the company said.

According to Masoud Afshar, the deputy head of NIDC for drilling operation, the drilled wells consisted of 15 development, five exploratory, and 79 workover ones.

He said that 77 of the mentioned wells were drilled in the operational zone of the National Iranian South Oil Company (NISOC), eight wells were drilled in the fields under the supervision of the Iranian Offshore Oil Company (IOOC), eight in the fields under the operation of the Petroleum Engineering and Development Company (PEDEC), two wells in the framework of project, and four in the operational zone of the drilling management department of National Iranian Oil company (NIOC).

Over 67,000 meters of drilling were conducted for drilling the mentioned wells, the official announced, and noted, “Comprehensive planning has been done to speed up the drilling operations and it is expected that with the reconstruction and modernization of the drilling machines and equipment, in the current year we will see the use of more drilling machines of the company in the oil-rich areas of the country.”

Stating that 63 of the 73 light, heavy and extra heavy drilling rigs in the company's fleet are in operation or being moved, he put the number of rigs being moved at 20.

The NIDC head has declared the company’s infrastructure improvement in line with the programs of the Oil Ministry as the most important achievement of NIDC in the past year.

Speaking at the company’s annual board meeting, Hamidreza Golpayegani said NIDC’s performance in various operational, technical, engineering, support, services, and headquarters departments has been significant and improved in the previous year compared to the preceding two years.

“According to the statistics of our planning department, the productivity index [of the company] reached 62 percent past year, while this figure was 48 percent in 1400,” Golpayegani said.

Pointing to the company’s strengths, weaknesses, and opportunities, the official stated: “Although the past year's performance in all sectors shows growth and an upward trend, we should not be satisfied and try to get the company to an even better position this year.”

As previously announced by Golpayegani, NIDC had dug and completed digging operation of 75 oil and gas wells in the Iranian calendar year 1400.

According to the official, the drilled wells consisted of six development, five exploratory, and 64 workover ones.

He stated that 56 of the mentioned wells were drilled in the operational zone of the National Iranian South Oil Company, 10 wells were drilled in the fields under the supervision of the Iranian Offshore Oil Company, three in the fields under the operation of Petroleum Engineering and Development Company, one in the field under the supervisor of Iranian Central Oil Fields Company, three wells in the framework of project, and two in the operational zone of the drilling management department of National Iranian Oil company.

 

Indus Water Treaty crucial for peace between Pakistan and India

The Indus Water Treaty is crucial to the peace and stability of the South Asian region. The treaty provides a framework for the sharing of water resources between India and Pakistan, which are two of the most populous and powerful countries in the region. The treaty has been in place since 1960, and despite some disputes and issues, it has managed to prevent any major conflicts between the two countries over water resources.

Under the treaty, both India and Pakistan have certain rights and obligations. India has the right to use the waters of the eastern rivers (Sutlej, Beas, and Ravi) for its use, while Pakistan has the right to use the waters of the western rivers (Indus, Jhelum, and Chenab) for its use. Both countries are obligated to inform each other about any new projects being planned or constructed on the shared rivers.

However, the fast-tracking of hydropower projects in Jammu and Kashmir by India has raised concerns about the implementation of the treaty. Pakistan has accused India of violating the treaty by not providing timely and adequate information about the projects being constructed on the shared rivers. Pakistan believes that the fast-tracking of these projects will reduce the water flow downstream and have an adverse impact on its agriculture and economy.

The issue of water resources is critical for both India and Pakistan. The Indus River is the lifeline of Pakistan’s agriculture and economy, and any reduction in the flow of water downstream can have a significant impact on the country’s food security and economic growth. India, on the other hand, is also heavily dependent on water resources for its economic development, and the fast-tracking of hydropower projects is seen as an important step towards achieving its energy goals.

However, it is important to note that the successful collaboration on the Indus Water Treaty is critical to maintaining peace and stability in the South Asian region. Any disputes or conflicts over water resources can have far-reaching implications for the region’s security and stability. The sharing of water resources is a complex and sensitive issue, and any mismanagement or disputes can lead to tensions between countries.

Therefore, both India and Pakistan need to work together to resolve any disputes or issues that may arise regarding the implementation of the treaty. Both countries need to communicate openly and transparently with each other about any new projects being planned or constructed on the shared rivers. The World Bank, which brokered the treaty, should also play an active role in monitoring the implementation of the treaty and resolving any disputes or issues that may arise.

Moreover, the collaboration between India and Pakistan on the Indus Water Treaty can also serve as a model for other countries in the region. South Asia is home to many transboundary rivers, and the successful collaboration between India and Pakistan on the Indus Water Treaty can provide a template for other countries in the region to manage their shared water resources.

Indus Water Treaty is critical to the peace and stability of the South Asian region. The successful collaboration between India and Pakistan on the implementation of the treaty is crucial to maintaining peace and stability in the region.

Indus Water Treaty is a binding agreement between India and Pakistan that provides a framework for the sharing of water resources between the two countries. The treaty is inviolable, and both countries have certain rights and obligations under the treaty. However, the fast-tracking of hydropower projects in Jammu and Kashmir has caused issues with the treaty, primarily with regards to the western rivers of the Indus, which are allocated to Pakistan under the treaty. To ensure the inviolability of the treaty, both India and Pakistan need to work together to resolve any disputes or issues that may arise regarding the implementation of the treaty.

Indus water treaty has so far proven to be a formidable arrangement, withstanding wars and political upheaval for decades now. This is an amazing success of global rule based order. And it also speaks volume of commitment shown by India and Pakistan. The joint institutional mechanism developed by IWT has continued to work and collaborate.

Courtesy: South Asia Journal