Fueling car in Lebanon now more than salary

Nearly 80 percent of the population is living below the poverty line. (AFP/File)
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Updated 21 October 2021

Fueling car in Lebanon now more than salary

  • To fill a medium-sized vehicle’s tank, Lebanese would now have to pay more than the monthly minimum wage of 675,000 pounds

BEIRUT: Filling a car with fuel in Lebanon cost more than the monthly minimum wage from Wednesday, after authorities effectively ended subsidies.
A revised price list published by the energy ministry set the cost of 20 liters of 95-octane fuel at 302,700 Lebanese pounds, or about $15 at the black market rate and five times the price set at the end of June.
To fill a medium-sized vehicle’s tank, Lebanese would now have to pay more than the monthly minimum wage of 675,000 pounds, at a time when nearly 80 percent of the population is living below the poverty line.
The revised price “marks a complete lifting of petroleum subsidies,” said Fadi Abou Chakra of the fuel distributors’ association. “The fuel price hike will cause the cost of services to also increase, especially transport.”
The ministry also raised the price of diesel and cooking gas after a drop in the value of the pound against the US dollar on the black market. The pound was selling for about 20,500 to the dollar, its lowest value in months.
The currency collapse is focusing attention on a forensic audit of Lebanon’s central bank, a key demand of the International Monetary Fund as part of reforms to unlock funds for a potential bailout.
President Michel Aoun on Wednesday met a delegation from the professional services firm Alvarez and Marsal, who told him their audit of the bank’s accounts would begin on Thursday morning. Aoun urged them to work quickly because of the urgency of the task. IMF official Jihad Azour said: “Last time we had a full update of the situation was August 2020, before the resignation of the previous government. Many things have happened since and we need to update the numbers and have a new baseline,” he said.


New tax regulations make imported phones around 30% costlier in Pakistan

Updated 25 January 2022

New tax regulations make imported phones around 30% costlier in Pakistan

  • Pakistan imposed uniform 17% sales tax on around 150 items, including imported phones, to meet IMF conditions
  • Local manufacturing increased to 24.66 million units in 2021, Pakistan imported 24.51 million phones in 2020

KARACHI: Pakistan’s imposition of new tax regulations has made imported high-end mobile phones around 30 percent costlier, but record local assembling has largely absorbed the impact, dealers and manufacturers said on Tuesday. 

Pakistan recently imposed a uniform 17 percent sales tax on around 150 items, including imported mobile phones, to meet one of the conditions of the International Monetary Fund (IMF) for the revival of the stalled $6 billion loan program. 

Apart from imposing 17 percent sales tax, the government also increased the fixed tax rate on the import of mobile phones valued more than $200.   

Imported phones valued between $200 and $350 will now be subject to Rs14,661 fixed tax and 17 percent sales tax, while handsets costing above $500 would be subject to Rs37,007 fixed duty and 17 percent sales tax, according to the Federal Board of Revenue (FBR).

The fixed tax is slightly less for those who purchase phones on passports within 60 days of their arrival in Pakistan.  

“The phone (iPhone 11 pro max) that was available for around Rs165,000 will now be available for around Rs230,000 after adding fixed tax and 17% sales tax,” Shahzad Ahmed, a mobile phone dealer at the Saddar mobile market in Karachi, told Arab News. 

Mobile phone dealers said the budgetary impact on consumers was minimal as such high-end mobile phone penetration was very low in the country. 

“Due to the availability of local alternatives for buyers, the sales impact is negligible as only high-end mobile phone prices have been increased, which are being used by quite a few consumers,” said Malik Khalid Iqbal, chairman of the All Pakistan Mobile Dealers' Association.   

But the dealers resented sudden imposition of higher duty and tax, calling on the government to revisit the decision. 

“They should have given time but it was implemented without that,” Rizwan Irfan, president of the Karachi Electronic Appliances Dealers’ Association, told Arab News.  

“Many dealers who have booked phones and consignments that are in transition will become costlier and may not fetch the right price, so the government should revisit its decision.”  

For the first time, Pakistan has surpassed imports and achieved self-reliance in local assembling of mobile phones of almost all major brands except iPhone.   

The South Asian country manufactured 24.66 million mobile phones in 2021, compared to the import of 10.26 million, according to the Pakistan Telecommunication Authority (PTA). In 2020, the country imported 24.51 million phones, compared to locally manufactured 13.05 million.  

“After the start of Samsung's production, 80% of all mobile phones are being assembled in Pakistan,” Aamir Allawala, senior vice-chairman of Pakistan Mobile Phone Manufacturers’ Association (PMPMA), told Arab News.  

“This will go up to 90 percent, when Xiaomi starts local production in March.”  

Manufacturers said tax on locally assembled phones was quite nominal as compared to the imported high-end devices. 

“On locally assembled phones below $100, the tax rate is only Rs20 per unit,” Allawala said. “Tax on phones costing between $100 and $200 is only Rs420 a unit. The sales tax and excise levy is little higher for the phones valued above $200, but definitely below 10% of total tax incidence.” 

Tax on locally assembled phones ranging between $350 and $500 is Rs13,210 and Rs26,380 for devices valued above $500, according to dealers and manufacturers.   

They said since 80% phones were being locally produced, there was no impact for buyers in terms of pricing. 

“On the other hand, iPhones and high-end Galaxy phones that are still not assembled locally have to face a price hike. This is very logical and fair in my opinion,” Allawala said.   

He ruled out the possibility of iPhone assembling in Pakistan, saying, “Only 10,000-15,000 iPhones are imported every month and at this volume, I don’t think local assembling is possible. iPhone will be manufactured only when its export would be made possible and for that, Pakistan’s ecosystem is at a nascent stage.”  

Mobile phone manufacturing became possible in Pakistan only after the launch of Device Identification Registration and Blocking System (DIRBS) in 2018. The system is designed to identify non-compliant devices operating on local mobile networks. 

The country is still paying high bills for the import of mobile phones. It recorded mobile phone imports worth $2 billion in the last fiscal year, while these imports crossed $1 billion mark from July till December this fiscal year, according to data released by the Pakistan Bureau of Statistics.


Saudi Aramco balances competing priorities as IKTVA enters 6th year

Updated 24 January 2022

Saudi Aramco balances competing priorities as IKTVA enters 6th year

  • New and existing energy sources need to act in parallel for a long time, says CEO

LONDON: The focal point of Saudi Aramco’s forthcoming In-Kingdom Total Value Add Forum will be the company’s initiative, launched in 2015, to further develop a local supply chain. 
In Aramco’s own words, the intention is to “transform and diversify the Kingdom’s economy through partnership and collaboration, creating high-skilled jobs for the Saudi population (and building) a resilient economy for the future.” 
The IKTVA program opens many opportunities for both companies and workers in Saudi Arabia, and reflects the objectives of the Kingdom’s Vision 2030 — but what of Aramco itself?
As the world’s leading crude oil supplier, with an output of some 10 million barrels per day, Aramco currently has a daily turnover of SR32.6 billion ($8.7 billion). That adds up to some $317.5 billion per annum, up from gross revenue of $205 billion and net revenues of $49 billion in the financial year 2020 — the last full year reported. 

With an income of such magnitude, Aramco would seemingly have little to worry about.
However, broader global issues require Aramco to come up with innovative strategies to overcome both present and future headwinds.
The 2021 United Nations Climate Change Conference, better known as COP26, articulated an “anti-oil” sentiment held by many countries, with a broad consensus to transition the global economy away from fossil fuels in favor of more environmentally friendly energy sources including solar, wind, tidal and geothermal. 
There is a shift, which began in earnest by Tesla and now includes legacy auto manufacturers such as VW, Volvo and Mercedes, from petrol/diesel engines to battery-powered electric vehicles. This trend is growing at an exponential pace, with Forbes reporting that almost 20 percent of cars purchased in China in the fourth quarter of 2021 were electric. This is likely the shape of things to come for the rest of the world.
These developments put Aramco in the spotlight as a giant of the carbon fuel sector, alongside a possible danger of becoming the world’s leading supplier of a gradually redundant commodity. 
However, the reality behind the headlines is that global oil demand is actually on an upward tangent, as the world emerges from an industrial dip caused by the two-year COVID-19 pandemic. 
According to a report from the US Energy Information Administration released on Jan. 11: “Rising economic activity and the easing of pandemic-related restrictions on other activities resulted in global oil consumption rising by 5.5 percent in 2021 from 2020.”
The same report goes on to state that with oil consumption outpacing production, the fourth quarter of 2021 saw significant increases in prices of the commodity, with Brent crude oil spot increasing from an average of $43 per barrel in the third quarter of 2020 to an average of $79 per barrel in the fourth quarter of 2021. 
Current oil prices are even higher, with the various grades of Arabian crude hovering between $87 and $89 per barrel.

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The EIA predicts that total world petroleum consumption of 96.9 million barrels per day in 2021 will slightly increase to 100.5 mbpd in 2022.  Is that level of demand sustainable? Aramco, for one, believes the answer is yes. 
“(Energy) alternatives are nowhere near ready to carry a big enough load, so new and existing energy sources will need to operate in parallel for a long time,” Aramco CEO Amin H. Nasser declared at the World Petroleum Council Congress, held in Houston in December 2021. 
Nasser went on to say that while “Aramco is committed to a net-zero economy … there are still no truly viable alternatives to conventional fuels in aviation, shipping, and even trucking.”
He added: “Oil and gas will be needed for decades to come, and accelerating the reduction in their emissions is a strategic and urgent necessity for climate goals to be met. We are not short of opportunities, such as producing lower carbon products like blue hydrogen and blue ammonia; developing more efficient and lower emission internal combustion engines; and making the Circular Carbon Economy that G20 world leaders endorsed last year a reality.”  
In short, Aramco seeks to maintain its dominant position in the global oil sector while aiming to emerge as a future leading producer of clean fuels — a two-pronged approach that is evident in several recent deals in both Europe and Asia.
With regards to oil supply, in the past fortnight Aramco acquired a range of assets from Poland’s state-owned energy corporation Orlen PKN, including a major oil refinery and hundreds of petrol stations, in a deal worth $288 million. A contract was also signed for Aramco to supply Orlen with 200-337,000 barrels of oil per day, adding more purchases to those agreed earlier. 
In terms of “new” energy, Aramco has also recently entered into agreements with two large South Korean entities — Korea Electric Power Corporation and the S-Oil Corporation — to conduct feasibility studies for the future supply of blue hydrogen, a petrol substitute with far lower carbon emissions.   
As Saudi Aramco balances these competing global priorities, it is simultaneously playing an active role in the diversification of the Saudi economy — ironically, away from a dependence on oil and its derivatives, and with an emphasis on small-to-medium sized enterprises as opposed to major conglomerates.
The company has a lot on its plate and the IKTVA Forum will no doubt offer a platform to further clarify its strategy and philosophy going forward.

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Gulf electricity interconnection project saves members $3bn

Updated 21 January 2022

Gulf electricity interconnection project saves members $3bn

RIYADH: Gulf countries have saved $3 billion since the establishment of the Gulf Cooperation Council Interconnection Authority in 2019, it said.

Savings have come from a reduced need for new generation plants, thus lower operating and maintenance expenses, and reduced carbon emissions, SPA reported.

The Authority has agreed an action plan for the establishment of a joint electrical interconnection project with the Egyptian Electricity Transmission and Jordan’s National Electric Power Co., it said.

In a two-day meeting, the parties agreed on preparing a business case to explain the benefits of electrical connection and to complete the required procedures, SPA reported.


Twitter offers NFT profile pics; Bitcoin falls below $40,000: Crypto moves

Updated 22 January 2022

Twitter offers NFT profile pics; Bitcoin falls below $40,000: Crypto moves

LONDON: Twitter’s premium users can display non-fungible tokens in new hexagonal profile pictures, as the social media giant embraces the growing craze of digital collectibles known as NFTs.

Currently, the feature is only available to Twitter Blue subscribers on Apple’s iOS platform, allowing them to link their accounts with crypto wallets where they keep their NFTs.

To distinguish them from regular profile pictures, NFTs are displayed in hexagons that, when clicked, display details about them including ownership.

Last year, Twitter — founded by Jack Dorsey — began allowing users to send and receive bitcoin. Dorsey quit as Twitter CEO in November to focus on another company he founded, Square, which has since changed its name to Block, a reflection of Dorsey’s desire to further embrace blockchain and Web3 technologies.

Sales of NFTs reached about $25 billion in 2021, according to data from DappRadar, but growth is believed to have slowed toward the end of the year.

The most-traded cryptocurrencies experienced another day of selling on Friday as Bitcoin slumped almost 9 percent to $38,464.90 as of 1:07 p.m. in London. Ethereum declined 11 percent to $2,794 and Solana lost 14 percent to $118.

Bitcoin was trading above $67,000 as recently as November.

“Crypto markets have been sitting on a critical support level for some time,” Stack Funds told CoinDesk. “Macro market weakness is causing a sell-off in risk assets. Further continuation of this sentiment will likely see BTC trade in the mid ‘30s.”

Risk assets are being hurt by expectations of at least three interest-rate hikes by the US Federal Reserve this year as it looks to counter accelerating inflation.

The selloff in cryptocurrencies has not deterred the new mayor of New York City Eric Adams, who said he plans to convert his first paycheck this week into bitcoin and Ethereum.

“New York is the center of the world, and we want it to be the center of cryptocurrency and other financial innovations,” Adams said in a statement. “Being on the forefront of such innovation will help us create jobs, improve our economy, and continue to be a magnet for talent from all over the globe.”


Mobily prepares major announcements for LEAP22 tech conference

Updated 23 January 2022

Mobily prepares major announcements for LEAP22 tech conference

RIYADH: Etihad Etisalat, known as Mobily, said it will launch a range of innovative and disruptive digital solutions during LEAP22, the technology event scheduled for Riyadh in February.

Mobily’s announcements will be in the area of the Internet of things, artificial intelligence, smart cities, smart health care systems and others, it said in a statement.

“LEAP is a turning point in the Kingdom’s journey toward digital transformation, elevating its position at the forefront of global players who develop and empower the latest technologies that shape the future of our world,” said Mobily CEO Eng. Salman Al Badran. “As the Kingdom moves toward enabling a leading digital economy, Mobily seeks to provide individuals and corporates with the tools they need to unlocking opportunities and pursue their ambitions.”

“At Mobily, we persistently contribute to the realization of Vision 2030 through providing advanced telecommunications services and digital solutions that contribute to transforming the Kingdom’s digitalization ambitions into reality, he said.

Leap will be held in Riyadh from Feb. 1 to Feb. 3, 2022.

Saudi Arabia has been embracing technology as a means to loosen the economy’s dependency on hydrocarbons.

In August, $1 billion of initiatives aimed at improving digital skills in the Kingdom were unveiled under the name Launch. Among the targets is an ambition to train one in every 100 Saudis to be programmers, and the creation of 25,000 jobs in data science and AI by 2030.

Saudi Arabia has also attracted the Middle East’s first Apple Developer Academy, which will initially focus on women coders.

LEAP will host 700 start-ups and will feature a host of keynotes, workshops and assemblies on topics from smart cities to space and satellites, health tech, future energy.

The LEAP Forward stage will tackle issues around the most prominent future technologies, including self-driving vehicles and AI, exosuits, nanorobotics, augmented reality, and bionics.

International speakers include Raghu Raghuram, CEO of cloud-computing giant VMware, Börje Ekholm, president and CEO of Ericsson, and Dr. Saket Kumar, chief data scientist for Global Premium Services at Google. Regional speakers include Manar Al-Moneef, regional CEO of GE Renewable Energy, and Ghinwa Baradhi, HSBC’s chief information officer in the Middle East and North Africa.

Altogether 450 speakers and 40,000 visitors are expected at the event.

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