Saudi crude output to fall to 9.8 million bpd in March — Falih

Saudi Energy Minister Khalid al-Falih speaks during a news conference in Riyadh, Saudi Arabia January 9, 2019. (Reuters)
Updated 12 February 2019
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Saudi crude output to fall to 9.8 million bpd in March — Falih

  • The March production figure means Saudi would be voluntarily cutting output by more than 500,000 bpd

LONDON: Saudi Arabia plans to produce around 9.8 million barrels per day of oil in March, over half a million bpd below its pledged production level under a global supply-cutting deal, Energy Minister Khalid Al-Falih told the Financial Times.
Exports would fall in March to 6.9 million bpd, according to the article published on Tuesday.
The March production figure means Saudi would be voluntarily cutting output by more than 500,000 bpd below its pledged production level under a deal between the Organization of the Petroleum Exporting Countries and allies led by Russia.
Under the deal reached in December and which came into effect at the start of the year, Saudi Arabia’s target production is 10.311 million bpd.
The news boosted Brent crude prices by more than 2 percent to nearly $63 a barrel.
Production in March would be 1.2 million bpd lower than Saudi Arabia’s November output, which was an all-time high.
In the interview, Falih addressed a US bill that might expose OPEC to antitrust lawsuits, saying the legislation could be “harmful” to the global economy, and expressed his hope that the United States would “do the right thing.”
He said if Saudi Arabia were unable to balance the market by adjusting production, the world would suffer “irreparably.”
A US House of Representatives committee approved the bill known as No Oil Producing and Exporting Cartels Act, or NOPEC, last week.


Pakistan government ready to pay political cost to salvage sinking economy, official

Updated 22 April 2019
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Pakistan government ready to pay political cost to salvage sinking economy, official

  • Pakistan in talks with IMF to bag $6-8 billion bailout program
  • Country’s financial experts expect thumbprint of IMF program on the upcoming budget

KARACHI: As Pakistan steps up efforts to negotiate loan program from the International Monetary Fund (IMF) before presenting federal budget for fiscal year FY20 next month, the top officials say the government is taking steps to salvage sinking economy, bracing itself for political repercussions.
Pakistan is currently negotiating with IMF expecting $6-8 billion loan program for stabilizing its wobbling economy suffering from current account deficit.
The country’s financial experts expect the upcoming budget to bear the thumbprint of IMF if a bailout is finalized before the budget is presented, which may not be before May 24, according to officials.
“As has been said earlier that the budget would be presented next month. Now we are taking steps that are not beneficial politically but we have to save the country and anchor the economy at a level where it does not further deteriorate. The situation is difficult but the government is trying to provide relief to economically vulnerable segment of society,” Syed Shibli Faraz, Leader of the House for the Senate of Pakistan, told Arab News on Monday.
“The government is cognizant of the fact that the recent gas and power tariff hike was painful for the masses and is now reversing its impact,” senator Faraz said adding that “lack of political will of the previous governments led to things reach an alarming state where ignoring them any further will lead to everything collapsing. It was because the previous governments did not comply with the IMF conditions.”
Talking about general perception that the IMF program will come with harsh conditionalities including additional taxes and expenditure curtailment that may slow the GDP growth rate, Faraz said, “I have also seen newspaper reports of PKR 600 billion to PKR 700 billion additional taxes [to be levied in the next budget] but I don’t know how we will do it?”
“However, the government will focus on broadening tax net instead of further burdening those who are already paying taxes,” he added.
Many economists question the wisdom behind such huge tax collection target when the fund has already downgraded country’s economic growth.
“When the IMF itself says that the growth would be around 2.9 percent then how such massive additional taxes could be generated from the depressed economy,” Dr. Ashfaque Hassan Khan, member of Economic Advisory Council, questioned while talking to Arab News saying “they are negating their own numbers.”
“This program will not work,” Khan warned. “I have repeatedly called for getting the plan B ready, which means aggressive import compression policy that requires less dollar and more focus on remittances.”
Pakistan is also fine tuning a new tax amnesty scheme to be announced to whiten the black money and facilitate documentation of undeclared assets hoping to collect huge sums. “We are expecting to collect a large amount and bridge the fiscal budget gap to some extent,” Faraz said.
In a major cabinet reshuffle recently, Prime Minister Imran Khan replaced country’s finance minister Asad Umar with Shaikh appointed as special adviser to the prime minister on finance, at a crucial time when Pakistan is in final stages of negotiating an IMF deal.
“Asad was working on solving basic structural issues of the economy but he become a victim of big lobbies,” Muzzamil Aslam, senior economist, told Arab News.
“Hafeez Shaikh is a technocrat who does not live in Pakistan and only comes in a ministerial position. He knows how to accommodate policies of international lenders without looking at the long term impact of their policies. He did not bailout or rescue any economy where he worked,” Aslam said.