ISLAMABAD: Pakistan will not launch any more conventional or Islamic bonds on the international market until June 30, 2015 and will not care about investors of Tuwairqi Steel Mills Ltd moving out, Finance Minister Ishaq Dar said on Tuesday.

“We do not intend to launch any sovereign paper until June 30 next year, neither conventional nor Islamic bond,” he said while responding to a question at a news conference on Tuesday. He said Pakistan had completed its portfolio of international capital market transactions.

The minister said Pakistan req­uested the International Monetary Fund to consider its case for disbursement of $1.1 billion (two instalments) in its Dec 17 meeting instead at the end of this month to make up for the previous loss.

He said the government was hopeful of delivering on its promise of achieving $15bn foreign exchange reserves by Dec 31, 2014.

He said Pakistan had completed all prior actions required to be taken before Nov 30 including appointment of chairman of National Electric Power Regulatory Authority (Nepra), the director general debt management and the net domestic assets targets.

The minister said the government had also decided not to go for distress sale of public sector assets and in fact it had taken off oil and gas companies from the active list of privatisation and divestment of shares in view of depressed oil prices.

FBR to lose Rs60bn revenue due to petroleum price cut

“There would be no distress sale of public sector assets and oil and gas shares are now off the active divestment list,” he said, adding there were reports suggesting oil prices to remain in the $70-80 per barrel band — not attractive to sell off oil and gas assets.

He said the sale of OGDCL shares on the international market could have fetched over $850 million in August but the protest campaigns by the Pakistan Tehreek-i-Insaf and Pakistan Awami Tehrik compelled its delay which was followed by sharp decline in oil prices. As a consequence, the transaction had to be cancelled because it attracted low returns and limited offers.

REVENUE LOSS: Responding to a question, the minister said the Federal Board of Revenue was estimated to face a Rs60bn hit due to recent decline in petroleum prices as its general sales tax collection would fall.

He dispelled the impression that politics had anything to do with recent reduction in oil prices saying the adjustment in oil prices was a professional domain of the Oil and Gas Regulatory Authority (Ogra) in the light of international market conditions and the system had been in place for almost two decades.

He said the prime minister had written letters to the provincial chief ministers to ensure that the benefit of reduction in petroleum prices reached the common man in the shape of reduced transport fares and agricultural input costs because transporters tend to immediately increase their fares on POL price increase but seldom reduced them proportionately.

He said the provinces were taking steps in that direction as it was their responsibility.

The minister ruled out considering hedging of oil prices in view of depressed market but said the corporations like Pakistan International Airlines (PIA) having independent board of directors should consider such options. He said it was difficult for the government to take such a political risk.

Responding to a question, the minister said the prime minister had deferred a decision on a summary for increase in gas tariff forwarded by the petroleum ministry to protect gas companies.

He said the prime minister had pended the decision but it was clear that increase would not be major for domestic consumers like in the case of electricity consumers.

Responding to a question on a threat by Tuwairqi Steel Mills investors to give up their investment in Pakistan, the finance minister said a past government entered into a very odd MoU with Tuwairqi and then signed an implementation agreement. The difference in price of gas at that time and now is phenomenal — about Rs17bn.

“I have said guarantee me the Rs17bn revenue. I am custodian of the revenues of the people of Pakistan and cannot compromise on their interests,” he said, adding that there had to be some accounting principle to bridge a gap between Rs58bn and Rs17bn.

“We want complete compensation. Unless we don’t secure that compensation for the people, I don’t care Tuwairqi stays or winds up. That’s not my priority”.

Published in Dawn December 3rd , 2014