Last update: Wed, 18 Jan 2017 10am

BR Research: All


Petroleum consumption has increased significantly over the last two years due to lower prices despite the government not passing on the entire impact of lower prices to consumers. Volumetric sales for key petroleum products (motor gasoline, furnace oil and diesel) for 2016 show an increase of 12 percent year-on-year in 2016, whereas the growth over 2014 cumulative figure has been over 20 percent.
Electricity tariffs should be going down pretty soon. Whether or not they actually will, is another debate. The Economic Coordination Committee (ECC) had earlier approved for consideration the Ministry of Petroleum's plea of revising the gas tariffs for power consumption down from Rs613/mmbtu to Rs400/mmbtu.
It isn't just China. The massive output of steel specially driven by Chinese overcapacity became a thorn in the side of many global economies (US/ EU) who slapped hefty anti-dumping duties on Chinese steel, going up to 240 percent. Pakistan also imposed a duty. But there are other countries too. India, Ukraine, Italy, South Korea, Taiwan are among those that are producing excess steel.
Another year is upon us. Another year gone by trying to resolve the power crisis that has engulfed the country for the past decade now. The government has been busy investing in energy projects and the advent of CPEC has brought in a massive influx of investment in the energy sector.
Last week, the Commerce Ministry gave sugar mills the green light to export 225,000MT of sugar, but without a subsidy. However, the mills are okay with that proposition, given the resurgence in global sugar prices. %Dªs the graph indicates, international sugar prices have increased more than the domestic price in Pakistan. However, there seems to be a persistent gap - Rs8.6 per kg as of December 2016 - that might be of concern.
The CPI tamed down once again to subside the fears of immediate inflationary pressure. On monthly basis, the headline number is down by 0.7 percent in December; biggest fall in 22 months. That has brought the yearly number down to 3.7 percent, with year to date average at 3.9 percent.
The declining exports in Pakistan have been the focus of many conversations lately and for good reason. Global trade started slowing down in 2014 but exports in Pakistan have been stagnant since 2011 and started declining thereafter; and even when they were increasing, they were paltry in comparison to some of Pakistan's competitors and peers.