daily check

Federal Budget: Aurangzeb holds virtual consultations with IMF
Federal Finance Minister Senator Muhammad Aurangzeb reaffirmed Pakistan’s commitment to continue economic reforms as per IMF recommendations under the $7 billion Extended Fund Facility (EFF) programme.

Finance Minister stated this while participating in a virtual meeting with the International Monetary Fund (IMF) to discuss Pakistan’s economic reforms and preparations for the FY 2025–26 budget.

The talks were also attended by Secretary of Finance Imdad Ullah Bosal and other key members of the economic team. The IMF was briefed on the country’s ongoing economic reforms, fiscal consolidation efforts, and budgetary proposals for the upcoming financial year. He welcomed Iva Petrova, the newly-appointed IMF Mission Chief for Pakistan, and expressed appreciation to outgoing Mission Chief Nathan Porter for his support and cooperation during his tenure.

During the meeting, the IMF team, led by its mission chiefs, assured Pakistan of continued support for stabilising the national economy. Discussions covered key issues such as achieving a primary surplus, enhancing provincial tax revenues, restructuring state-owned enterprises, privatisation initiatives, and right-sizing of public sector institutions.

Virtual consultations between Pakistan and the IMF on the upcoming budget are ongoing, with both parties working towards aligning economic policies and reform measures.

IMF expects Rs20tr revenue, stricter spending
As virtual technical-level discussions on the upcoming federal budget begin, the International Monetary Fund (IMF) expects Pakistan’s total revenue to grow to nearly Rs20 trillion in the next fiscal year, up from the current estimate of less than Rs17.8tr, with an emphasis on tight expenditure controls to ensure sustainable debt servicing.

After three days of technical discussions through video link, formal policy-level negotiations on budget finalisation are set to begin on Monday (May 19) and continue until Friday (May 23). The agreement between the IMF staff mission and the authorities on next year’s budgetary measures and macroeconomic framework would lead to the announcement of the federal budget on June 2.

The IMF has already put on the table its projections for major economic indicators, including fiscal and monetary policies, envisaging an economic growth rate of 3.6 per cent and average inflation of 7.7pc. This means the inflation rate would be significantly higher than the current year’s average of 5.1pc. The combination of economic growth and inflation is expected to jack up revenue collection by more than Rs1.4tr from the current year’s estimated collection of about Rs12.4tr.
However, besides the FBR’s revenue collection, a major push for expansion in revenue base is being envisaged to come from provincial governments and agriculture income tax would be a key area for additional efforts.

Overall revenues for the next year are targeted to cross Rs19.9tr or 15.2pc of GDP compared to Rs17.8bn of budget estimates for the current year or 15.9pc of GDP.

The Fund expects Pakistani authorities to continue to focus on expenditure control, trimming it from 21.6pc of GDP in the current year to Rs20.3pc next year.

But even then the expenditures would get close to Rs26.57tr next year compared to budget estimates of about Rs18.9tr. The two sides have yet to work out the final numbers on revenue collection and revised expenditures, particularly those that have arisen recently due to the security situation.

The IMF expects Pakistan to reduce its fiscal deficit from 5.6pc of GDP during the current year to 5.1pc next year, or about Rs6.67tr. The government is also being asked to maintain a primary surplus — revenues minus non-interest expenditures — of around Rs2.1tr, a key condition for improving debt sustainability. Achieving this target is anticipated to bring down the debt-to-GDP ratio from the current 77.6pc to 75.6pc in FY26.

On the other hand, the Ministry of Finance has asked all the ministries and divisions to submit an additional pro forma (Form-III-C) to capture the climate-related component of subsidies to enhance and expand reporting on climate considerations in all allocations of the annual budget.

 “Climate tagging of subsidies is one of the requirements under the Extended Fund Facility (EFF) agreed with IMF,” read a circular issued to all government entities and ministries.

The federal budget is required to map climate relevance in three categories of adaptation, mitigation, and transition.

The public expenditure under the running of civil government and public sector development programme is being tagged and the process is now being extended to other expenditures like grants and subsidies to identify the overall climate-related public expenditure. 

Petrol price remains unchanged, diesel price slashed by Rs2 per litre
Instead of passing relief to consumers, the federal government on Thursday announced to keep the petrol price unchanged for the next fortnight.

The government, however, slashed the high speed diesel by Rs2 per litre, according to a notification issued by the Finance Division. New price of HSD is Rs254.64 per litre.

IFEM on petrol, diesel hiked by Rs1.87 per litre
After consultation with the prime minister, the government has increased the IFEM (Inland Freight Equalisation Margin) by Rs1.87 per litre for the next 12 months to cope with the Rs34 billion losses to refineries and oil marketing companies (OMCs) till June 30, 2025. The refineries and OMC face a huge loss because of the sales tax exemption on petrol, diesel, kerosene oil and light diesel oil. This not only made upgrade projects unviable but also increased the operational cost of refineries and OMCs because of no input sales tax adjustments. “The increase in IFEM will be adjusted in the relief from May 16, 2025 on account of reduction in POL prices in the international market,” a senior official told The News. However, the PM deferred the hikes in OMCs and dealers’ margins.

The ECC meeting of May 13 endorsed the hike by Rs4.12 per litre in principle as suggested by the Petroleum Division, but it was decided that the final decision would be taken by the prime minister. Now the prime minister has agreed to increase the hike in IFEM for the next 12 months to cope with the loss refineries sustained in the whole current FY25. He, however, sought more consultation on increasing OMCs and dealers’ margins. More importantly, the ECC meeting has also increased the cap or ceiling of the Petroleum Levy up to Rs90 per litre. The Petroleum and Finance divisions have been authorised to decide after the PM’s approval. Earlier, the upper cap for the Petroleum Levy was set at Rs70 per litre which was increased to the prevailing Rs78.02 per litre. The levy on high-speed diesel stands at Rs77.01 per litre.

Cut in power base tariffs by Rs2 per unit likely as fuel costs drop
Pakistan’s electricity watchdog may slash base power tariffs by over Rs2 per unit in the next fiscal year starting from July 2025, offering consumers potential relief of up to Rs400 billion, as energy cost forecasts drop and demand rebounds, regulators said on Thursday.

The National Electric Power Regulatory Authority (Nepra), in a public hearing, led by Chairman Waseem Mukhtar, reviewed the Power Division’s projections for 2025-26, which estimate the power purchase price will fall to as low as Rs24.75 per unit from the current Rs27. The Ministry of Energy anticipates this cut — driven by softer fuel prices and improved operational efficiencies — could trigger a 2.8 per cent to 5pc jump in power consumption.

At the core of the case are assumptions tied to global commodity prices, inflation, and currency depreciation. The government projects the average per-unit consumer cost may slide to Rs6.8-Rs8.1, even as total fuel costs could climb as high as Rs1.28 trillion depending on macroeconomic variables. The rupee is expected to average around 300 per US dollar next year. Officials countered that April saw a 28pc demand surge, attributed to recent tariff reductions that lured industries back to the grid. “If prices stay low and stable, demand will continue climbing,” they said, pointing to the IMF’s 3.6pc GDP growth projection for 2026.

Senate okays Off-Grid Power Levy Bill amid opposition outcry
The Senate Thursday adopted the House Standing Committee concerned report on the Off-the-Grid Captive Power Plants Levy Bill, while the opposition chanted “no, no”, fearing the legislation would lead to shutdown of industries and cause joblessness in the country.

Law Minister Azam Nazeer Tarar defended the legislation and explained that the government decided to tax captive power plants after threadbare discussions and consultations and having carried out market analyses. He pointed out that the industries had already ‘enough’ benefits and gained from exemption. “But now if the poor man and general masses are to be taken care of and create job opportunities, then such steps are needed to be taken,” he contended, brushing aside the opposition’s concerns.

Tarar said enough support had been extended to the industries in terms of captive power plants and now it was time benefits should reach the poor man as well. Already, he noted, during the last 60 days, around Rs10 per unit relief had been given to the domestic and commercial consumers due to various measures taken by the government and levying captive power plants was part of the overall policy.

The minister conceded that the proposed levy would also affect prime minister’s sons, the government circles as well as lawmakers sitting across the aisle, but it was imperative to do so.

Earlier, as Senator Anusha Rehman tabled the standing committee report on the bill in the House, Leader of Opposition Syed Shibli Faraz said that captive power plants were allowed in view of power loadshedding and costly electricity, which paid off and industries regained competitiveness and jobs were also created but this latest move would reverse the gains.

He alleged that industries had been specifically targeted and that this step would be counter-productive after the industries had made significant investment as well and had updated their plants after an audit was carried out previously.

Earlier, Syed Waqar Mehdi of the PPP from Sindh was administered oath as a new member of the House. Congratulating him, Leader of Opposition Shibli Faraz regretted that on one hand, a senator from Sindh was elected within 30 days, one senator from Balochistan had made his way to the House and poll schedule was issued for a vacant seat in Punjab while, on the other hand, Khyber Pakhtunkhwa was being denied this constitutional right of representation in the Senate.

Law minister again rose and pointed out that the matter of reserved seats was sub judice and pending before a 13-member bench of the Supreme Court.

Support scheme for wheat growers: 1,000 free tractors, cash grants delivery begins in Punjab
For the first time in Punjab’s history, 1,000 free tractors, along with cash grant scheme worth Rs5,000 per acre, has been launched for wheat farmers.

Chief Minister Punjab Maryam Nawaz launched the scheme by giving tractors and cash grant to wheat farmers in a ceremony, held at Rice Institute Kala Shah Kaku

Maryam inspected 75 tractors and other agricultural equipment worth Rs300 million gifted by China. She was given a briefing about latest tractors and agricultural equipment. She inspected 12 latest Chinese tractors.

CM Maryam Nawaz announced an increase in loan limits under the Kissan Card scheme from Rs150,000 to Rs300,000, and a 95pc subsidy on solarisation of agricultural tube-wells. She also introduced a helpline and SMS service for farmers without Kissan Cards to access government support.

Maryam Nawaz announced that 20,000 green tractors would be provided on subsidy next year, along with the establishment of agricultural machinery rental centres in every tehsil.

In her address, the CM praised the success of Operation Bunyanum Marsoos, paying tribute to Prime Minister Shehbaz Sharif, Army Chief General Asim Munir, and all military and civil institutions. She stressed that national security should remain above political divisions, noting that the politics of hatred had harmed the country, but peace and cooperation are now steering Pakistan toward progress.

Fertiliser makers upset at tax hike proposal
Fertiliser makers are upset over reports that the government intends to increase the federal excise duty on key ingredients to 10 per cent in the budget for FY26.

Fertilisers are currently subjected to a five per cent federal excise duty (FED), but no GST is levied. Diammo­nium phosphate (DAP) has an additional five per cent sales tax levy and there are varying levels of taxes on inputs, which push up the cost of production.

Fertiliser makers say they recognise the government’s fiscal constraints and the broader objective of expanding the tax base in alignment with IMF recommendations, but at the same time call upon the government to reconsider this proposed policy measure in view of its potentially adverse effects on the agriculture sector.

Fertilisers such as DAP and urea are indispensable for achieving optimal crop productivity, they contend.

“Any proposed increase in taxation, whether through GST or FED, will further erode farmers’ purchasing capacity and disrupt balanced nutrient management, compromise soil health, crop yields, inflation, and rural livelihoods,” retired Brig Sher Shah Malik, Execu­tive Director of the Fertiliser Manufac­turers of Pakistan Advisory Council (FMPAC), cautioned the government.

About the threat to agriculture productivity, he said DAP and urea were fundamental to achieving optimal crop yields, particularly for staple crops like wheat, cotton, rice, and maize.

Farmers are already grappling with rising production costs, volatile international prices, and declining profitability, leading to reduced fertiliser application — especially of DAP.

Sher Shah Malik urged the government to retain the current tax regime on fertilisers to prevent additional a cost burden on farmers and safeguard agricultural output. Moreover, if any relief is being considered for farmers, it should be handled through a direct targeted subsidy mechanism rather than by reducing the output GST.

He asked the government to hold consultations with stakeholders before finalising any budgetary measures.

Topline Securities’ analyst Tanweer Ahmed said urea sale is expected to clock in at 238,000 tonnes, down 24pc from 251,000 tonnes in April last year.

Likewise, sales may fall by 18pc month-on-month.

This will take the offtake to 1.35 million tonnes, down 37pc YoY compared to 2.1m tonnes in 4M2024, mainly due to weak farm economics and water shortage, he said. Closing inventory of urea is likely to be around 1.16m tonnes in April 2025, up from 820,000 tonnes in March. Inventory level of urea is likely to be highest in 94 months, he added.

Total DAP sales during April 2025 are anticipated to be around 104,000 tonnes, up 12pc YoY and 113pc MoM. In 4M2025, total DAP offtake is anticipated to clock in at 254,000 tonnes, down 33pc YoY.

Closing inventory of DAP is likely to be around 186,000 tonnes in April 2025 compared to 187,000 tonnes in March 2025 and 117,000 tonnes in April 2024.

Maryam solves crop supply chain problem with EWR financing facility
Punjab Chief Minister Maryam Nawaz has taken decisive steps to solve a billion-dollar problem in Pakistan’s crop supply chains through the launch of the Rs15 billion Chief Minister Punjab Electronic Warehouse Receipt (EWR) Financing Facility.

Officially ratified by the provincial cabinet, this multi-year initiative not only empowers farmers and stabilises wheat prices but also directly addresses deep-rooted inefficiencies in the Punjab’s agricultural system, particularly in maize, rice paddy, and wheat, which collectively represent a $12.6 billion harvest value.

According to the documents obtained by The News, systemic weaknesses in post-harvest supply chains result in staggering losses estimated at $1.1 billion annually, according to calculations based on FY22 crop values and estimates from FAO, USAID, and JEC reports.

The breakdown is sobering: sun-drying practices lead to $154 million in losses, traditional storage accounts for $238 million, unfair price deductions at markets cost farmers $424 million, and quality deterioration adds another $308 million in losses. They not only reduce farmer income but also severely limit Pakistan’s competitiveness in agricultural exports.

Chief Minister Maryam Nawaz’s administration is tackling this challenge head-on through the EWR Financing Facility. By digitising the storage and financing of wheat, starting with the 2025 harvest—the government aims to build a modern, transparent, and efficient supply chain model that can be replicated across other key crops. Under the new scheme, small-scale farmers (owning up to 50 acres) and wheat traders can store their produce in accredited warehouses and receive up to 70% of the commodity’s market value in formal financing, backed by an electronic warehouse receipt verified under Collateral Management Companies (CMC) Regulations 2019.

Solarization of agri tube wells: CM Maryam announces major subsidy
Announcing enhancement in loan grant through Kissan Card from Rs150,000 to Rs300,000 and a subsidy up to 95 percent on the solarization of agricultural tube wells, Chief Minister Punjab Maryam Nawaz Sharif also announced provision of green tractors on a subsidy to 20,000 farmers next year along with the establishment of rental agriculture machinery centres in every tehsil.

She announced launching of an SMS and a helpline system for farmers who do not possess Kissan Card.

The Chief Minister while addressing a ceremony at Kalashah Kaku Rice Research Institute congratulated the farmers on the success of Operation Bunyan-um-Marsoos. She paid tribute to Prime Minister Shehbaz Sharif, Army Chief General Asim Munir, every officer and soldier of the Pakistan Army. She commended the performance of Rangers, Police, Civil Defense, administration and all government institutions.

She said, “Pakistan is proud of its armed forces and the nation stood united and played an important role for the security of our country. Our survival exists with the existence of Pakistan. May Almighty bless our country till eternity, when it comes to national security there should be no disagreement and disunity among our ranks. The politics of hatred caused great damage to Pakistan. When the politics of hatred ended, Pakistan started treading on the path of progress and prosperity once again.”

She highlighted, “When the war started, our enemy used to say that it is a small country and the people living there keep fighting among themselves. Almighty helped and we defeated the enemy. Almighty’s help does not come to those who create ill will and hatred. The political, military leadership, the public and the media lent full support to all stakeholders during the war.”

She maintained, “On behalf of our farmers and the citizens, we salute the political and military leadership. It was not a war of borders but a war of ideology and sentiments. After the victory in the war, Pakistan is being recognized as a strong and powerful country across the globe. China, Turkiye and Central Asian countries by maintaining a firm stand with Pakistan is a historic victory.”

She added, “Those who predicted the collapse of Pakistan’s economy are now calling it a miracle. The economy of Pakistan is showing a positive turnover in a short span of time due to sincere leadership. The reduction of inflation from 40 percent to almost zero is no less than a miracle. During my visit to Lahore, a woman congratulated me on the reduction in vegetable prices. Onions, which used to sell at Rs300 per kg in Punjab, are now available at Rs50.”

The CM said, “Owing to the reduction in the prices of flour and roti, it has become easier for the poor to have both ends meal. Due to poor performance of previous incompetent government, electricity bills increased sharply. Prime Minister Muhammad Shehbaz Sharif is working hard to bring down electricity rates. Owing to reduction in electricity rates, electricity bills will also come down. Overseas Pakistanis were prevented from sending remittances to Pakistan, but with the help of Allah Almighty, record foreign remittances are sent to Pakistan.”

The Chief Minister said, “I congratulate those farmers who received free tractors. I also congratulate them on receiving cash support. A great amount of hue and cry was raised that the farmers would face financial difficulties in Punjab. Those who tried to create fissure between the farmers and the government failed miserably. The farmers of Punjab are benefiting from the historic package. The farmers did not listen to the baseless propaganda and grew wheat on my appeal. I assured the farmers to grow wheat without fear and the government would not allow any loss accruing to them.”

She added, “Instead of giving support price of wheat, direct subsidy is being given to the farmers. I want to put all the resources at the disposal of our farmers, but some tough decisions need to be made to create a balance in the economy. A support price worth Rs5,000 per acre is being given to the wheat farmers. The Punjab government is striving to the utmost to reduce the cost of seed, manure, pesticides, electricity bills of tube wells and diesel. People used to discourage by forbidding not giving loans to the farmers as the government will not receive them back. 85% of the money has been returned through Kissan Card.”

She maintained, “Earlier, green tractors were available during the tenure of Nawaz Sharif and now, when the government of Nawaz Sharif came to power once again, green tractors are being given to the farmers. During the wheat cultivation season, seeds and pesticides used to become expensive and there was a shortage of fertilizers. By the grace of Almighty, everyone is getting abundant fertilizers at a reasonable price.”

The Chief Minister outlined, “Due to early sowing, cotton will increase by 30 to 40 percent and its production will be 6 million bales this year. The farmers do not be misled by anyone as the government will lend them complete support and will also redress their difficulties and grievances. The coming year will bring more improvement and prosperity.”

She added, “I earnestly wish to see every farmer to become prosperous and happy in Punjab. Pakistan stands at the forefront in the agricultural sector. Almighty provides means to earn livelihood and the farmer works hard to yield maximum crop.”

She also congratulated Provincial Minister for Agriculture Ashiq Kirmani, Secretary Agriculture Iftikhar Sahu and the entire team of the agriculture department.

Large-scale manufacturing posts 1.79% growth in March
Pakistan’s large-scale manufacturing (LSM) sector grew by 1.79 percent in March 2025 compared to the same month last year, the Pakistan Bureau of Statistics (PBS) reported on Thursday.

During the July-March period of the current fiscal year 2024-25, the LSM sector contracted by 1.47 percent compared to the same period last year. This downturn highlights the ongoing challenges faced by key industries. During these nine months, production has increased in tobacco, textile, wearing apparel, coke and petroleum products, automobiles and other transport equipment while it decreased in food, chemical products, von-metallic mineral products, iron and steel products, electrical equipment, machinery and equipment and furniture.

The LSM sector is crucial to Pakistan’s economy, accounting for 69.3 percent of the country’s total manufacturing and contributing 8.2 percent to the gross domestic product (GDP). Despite the year-on-year growth, the sector posted a month-on-month contraction of 4.64 percent from February 2025. However, manufacturing activity continues to face significant challenges that are impeding broader sectoral growth.

Comparing the March 2025 performance with March 2024, several major industries faced a sharp decline. The iron and steel sector saw a contraction of 4.24pc, machinery and equipment 71.7pc, and fabricated metals output shrank by 19.1 percent.

Despite the overall contraction, some sectors posted gains on a year-on-year basis. Textiles output surged by 5.15 percent, automobiles by 18.8pc, leather products increased by 4.33 percent, pharmaceuticals 4.75pc. Other sectors that reported growth included coke and petroleum products, up by 4.47pc, computer, electronics and optical products by 8.15pc, food 20pc, and sugar by 67pc. Cotton yarn output rose by 8.8 percent, and cotton cloth production increased by 0.74 percent.

M-6 to be completed at all costs, Aurangzeb assures NA
Finance Minister Muhammad Aurangzeb on Thursday assured the National Assembly that the Sukkur-Hyderabad-Karachi Motorway (M-6), which is essential for Pakistan’s economy, would be completed at all costs while allocations for the project would also be made in the Public Sector Development Programme (PSDP).

The minister said the project was among government’s priorities and would go ahead with funding either through foreign sources or the Public Sector Development Programme (PSDP). He said the federal budget is currently being finalised, and the Minister for Planning will be informed about the importance of the project so that appropriate allocations can be made.

Minister of State for Planning, Development and Special Initiatives, Chaudhry Armaghan Subhani while responding to calling attention notice over the project’s exclusion from the PSDP 2024–25, clarified that although the motorway did not make it to this year’s development portfolio, he assured members that the Sukkur-Hyderabad Motorway (M-6) would be included in the PSDP 2025-26 and treated as a priority initiative under multiple funding mechanisms. He said that the Ministry of Communications has already proposed Rs10 billion for the M-6 in the next PSDP, with the figure subject to revision.

SBP forex reserves rise by $71m to $10.4bn
Pakistan’s central bank’s foreign exchange reserves increased by $71 million to $10.403 billion during the week ended May 9, the State Bank of Pakistan said on Thursday.

The total liquid foreign reserves held by the country rose by $131 million to $15.614 billion. The reserves of commercial banks also increased by $61 million to $5.211 billion.“On May 13, 2025, the SBP received the second tranche of SDR760 million ($1,023 million) from the IMF under the EFF programme. The amount will be reflected in SBP’s foreign exchange reserves for the week ending on May 16,” the central bank said in a statement.

The latest IMF disbursement provides much-needed relief to Pakistan’s fragile finances, helping to boost the country’s foreign exchange reserves and stabilise the economy. The SBP forecasts that the current account will remain in surplus throughout fiscal year 2025 and anticipates that its foreign exchange reserves will rise to $14 billion by June 2025.

RDA inflows drop 25% MoM in April
Inflows through the Roshan Digital Account (RDA) fell to $177 million in April, representing a 25 per cent decline from the previous month.RDA inflows reached $10.18 billion from September 2020 to April 2025.

Analysts said the total amount received under the RDA continued to rise, reflecting strong participation from overseas Pakistanis. A decline in monthly inflows indicates a temporary slowdown after recent highs.

The number of digital accounts rose to 814,244 by April, up from 805,422 in March.“The net repatriable liability stood at $1.9 billion, or 18.6 per cent of total inflows, indicating that a large portion of funds remains invested locally. To date, $6.53 billion has been utilised within Pakistan, mainly in Naya Pakistan Certificates and Roshan Equity,” said Saad Hanif, head of research at Ismail Iqbal Securities.  “Despite the monthly dip, the rising cumulative inflows and steady liabilities reaffirm the RDA’s role in supporting foreign exchange reserves. Backed by IMF-led reforms and improving macro fundamentals, the initiative continues to attract long-term diaspora investment,” Hanif added.

On Wednesday, Pakistan received the second tranche of $1.02 billion from the International Monetary Fund (IMF) as part of the $7 billion loan programme, which has further strengthened foreign exchange reserves, reinforcing macroeconomic stability.

Last week, the IMF completed the first review of the 37-month Extended Fund Facility (EFF) that the global lender agreed with Islamabad last year. This review resulted in the approval of a $1 billion disbursement for Pakistan. Additionally, the IMF approved a new loan of $1.4 billion under its climate resilience fund.

The RDA facility, in collaboration with commercial banks, enables the Pakistani diaspora to open a digital bank account in Pakistan. The account can be used for investing, banking and payments. Remittances from overseas can also be sent to Pakistan via the RDA.

Pakistan pushes two-way power trade via CASA-1000 Corridor
Pakistan on Thursday pitched a bold proposal to transform the CASA-1000 energy corridor into a two-way trade route, offering to supply surplus electricity to Central Asian partners during winter, as Power Minister Awais Leghari called for deeper regional energy cooperation.

Speaking virtually at the Intergovernmental Council meeting in Dushanbe, Leghari urged swift completion of the project linking Kyrgyzstan and Tajikistan s hydropower surplus with Pakistan and Afghanistan. But he went a step further proposing a reverse energy flow to allow bilateral trade through the same network, especially during Pakistan s off-peak winter months. CASA-1000 is not just a transmission line it s a platform for prosperity, Leghari said. Pakistan is ready to supply electricity to regional partners when they need it most.

The minister underscored Prime Minister Shehbaz Sharif s commitment to completing the long-delayed project, calling it a strategic tool for energy security, economic growth, and regional trust-building. Despite delays, he said Pakistan has secured and maintained its CASA-related infrastructure and is fully aligned with the project s future rollout. Energy ministers from Afghanistan, Tajikistan, and Kyrgyzstan, along with global stakeholders, attended the meeting. CASA-1000, once operational, is expected to transport 1,300MW of clean energy across 1,200 kilometers.

Minister informs NA: Reko Diq project to generate over $75bn in free cash flows
Federal Minister for Energy (Petroleum Division) Ali Pervaiz Malik said that Reko Diq Project will be the largest Western investment in Pakistan and is forecasted to generate more than $75 billion in free cash flows over the current life of mine plan which is nearly 37 years.

In written reply to a question to the National Assembly on Thursday, the minister said that total volume and estimated value of Reko Diq (RD) is; Phase-I production starting 2028: Targeting 300,000 oz/annum of gold and 200,000 tons/annum of copper. He said that Phase-2 production is starting 2034: 500,000 oz/annum of gold and 400,000 tons/annum of copper.

He said that these numbers are based on real cash flows, which are conservative. He said the nominal free-cash flows assuming a standard commodity price escalation may yield to more than $100 billion of cash flows.

Barrick’s Reko Diq project in Pakistan aims new financing

The minister said that project structure with 25 per cent share of Balochistan besides taxes and royalty provisions, ensures that a significant share of the economic benefits of the project will flow to Pakistan, with the majority of those amounts paid to the Government of Balochistan.

He said the key fiscal terms for the project include (among others) are: - five per cent royalty payable to the Government of Balochistan, one per cent net smelter return payable to the Government of Pakistan. He said that 0.5 per cent export processing zone surcharge.

To ensure that Balochistan is receiving benefits during the development and construction phases, the minister said that advance royalty payments to the Government of Balochistan were made by the Project Company in year 1 ($5 million) and year 2 ($7.5 million) and will be made in year 3 and thereafter until commercial production ($10 million per year), for a maximum total amount of advance payments of $50 million.

The minister said that according to the bankable Feasibility Report, the key development phases are: Phase-1 construction: 2025 – 2028, Phase-1 Production: 2028, Phase-2 construction: 2028 – 2033, Phase-2 production: 2034

He said that adequate measures and steps have been ensured and taken for environmental safeguards, community development and employment opportunities besides local business opportunities. He said that $5.3 million has been spent in education, health, skills training, and clean water access since 2022.

He said that construction phase: one per cent of all construction capital (estimated at approximately $57 million for Phase 1 and $33 million for Phase 2 based on the updated feasibility study); $10 million has already been paid toward this commitment in advance to Government of Balochistan.

About the operating phase of the project, the minister said that 0.4 per cent of annual revenue during every fiscal year commercial production estimated at approximately $25 million per year. He said that major local employment: 7,500 jobs during peak construction; 4,000 jobs in the long term. Currently, 77 per cent of RDMC employees are from Balochistan.

He said that various steps taken to ensure maximum possible benefit to the people of Balochistan include royalty at five per cent of revenue (net smelter revenue) goes to the Government of Balochistan. He said that an advance royalty arrangement has been made, providing total of $50 million until production commences in 2028, after which regular royalty payments will begin.

The minister said that 75 per cent of employees in the project are from Balochistan. 4,000+ long term jobs and 7,500+ people during peak construction will be employed. He said Reko Diq Mining Company (RDMC) is governed by a board chaired by the chief secretary of Balochistan, with the secretary Mines and Minerals as a member, alongside representatives from federal state-owned enterprises (SOEs) and Barrick. The board meets quarterly to oversee project progress and ensure transparency, he said.

 

FBR may allow import of 5-year-old used vehicles
The Federal Board of Revenue (FBR) is considering a proposal to allow import of up to five years old and used vehicles in the coming budget (2025-26) to promote competition in auto industry.

Sources told Business Recorder that the proposal is to extend the current age limit on imported used vehicles from three years to five years across the board.

Presently, the government allows the import of used cars up to 3 years old and SUVs up to 5 years under special schemes. The new policy may standardize the age limit to five years for all vehicle categories.

Gwadar Port, GFZA: FBR allows duty, tax-free import of vehicles

In the last budget for 2024-25, a 15% RD was imposed on imported used cars exceeding 1,300cc.

The government is also examining the proposal to gradually phase out regulatory duties and slash tariffs on Completely Built-Up (CBU) vehicles to below 10 percent, with a broader goal of bringing auto-sector tariffs down to single digits within five years.

According to a tax expert, the FBR has already taken appropriate checks to control misuse of the import of old and used vehicles. The personnel baggage scheme, transfer of residence and gift scheme were reportedly misused on the import of old and used vehicles.

Under the law, the overseas Pakistanis are entitled to import vehicles under personnel baggage scheme, transfer of residence and gift scheme who have not imported, gifted or received a vehicle during the last two years under Import Policy Order (IPO), 2022.

The Board had clarified that customs department will not charge 18 percent sales tax on auction of serviceable old and used vehicles in case sales tax has been paid at the time of local or import stage. However, sales tax would be charged on auction of unserviceable/ condemned old and used vehicles from the bidders, irrespective of the fact that sales tax has already been paid on such imported or locally purchased vehicles, FBR added.

Textile sector may return to costlier CPPs: PD’s PPP projections to Nepra draw sharp criticism
The Power Division came under heavy criticism on Thursday for submitting what were termed unsubstantiated Power Purchase Price (PPP) projections for FY 2025-26 to Nepra and for the continuing unreliable power supply by distribution companies (Discos). Concerns were raised that these issues could drive the textile sector back to costlier Captive Power Plants (CPPs), despite grid electricity being comparatively cheaper.

The National Electric Power Regulatory Authority (NEPRA) held a public hearing chaired by Waseem Mukhtar, with participation from Member (Technical) Sindh Rafique Ahmad Shaikh, Member (Technical) KPK Maqsood Anwar Khan, and Member (Law) Amina Ahmed.

Discussions revolved low hydrology levels, inflation, interest rate forecasts, GDP growth, solar tariffs, and fuel price assumptions. The Power Division team, led by Additional Secretary Mehfooz Bhatti and CPPA-G’s Naveed Qaiser, presented seven scenarios using sensitivity analysis based on demand, hydrology, fuel prices, and exchange rates. In scenario one, CPPA-G has projected PPP at Rs 24.75 per unit, scenario 2- Rs 26.04 per unit, scenario 3- Rs 25.88 per unit, scenario 4- Rs 26.33 per unit, scenario 5- Rs 26.70 per unit, scenario 7- Rs 26.55 per unit and scenario 7, Rs 26.22 per unit. In response to a question, the representative of CPPA-G said that scenario 4 and 5 are likely to be implemented next year. Across the analyzed scenarios, indigenous fuels constitute 55% to 58% of the overall energy mix, while clean fuels contribute between 52% and 56%. Scenario 5 — marked by a high exchange rate of Rs 300/$, low hydrology, standard fuel prices, and normal demand—yields the highest projected PPP at Rs. 26.70/kWh. In contrast, Scenario 4 which assumes normal demand and an exchange rate of Rs 280/$, results in the lowest PPP at Rs. 24.75/kWh, primarily due to reduced capacity charges.

CPPA-G representative Naveed Qaiser noted that the GDP growth, inflation and interest rates were projected on the information from IFIs, Finance Ministry and domestic financial experts.

Amir Sheikh from Lahore stated that industry demands that electricity tariff decreases and in no way increases from July onwards as compared to the April/May/June quarter.

“Already the quality of power from grid is very poor resulting in up to 10% production loss as compared to captive generation and industry is considering switching back to captive. If tariff also increases, then it would lead to big fall in consumption,” he said adding that despite major renegotiations with IPPs, industry is amazed that the proposed tariff for next year is almost the same as last year and the benefit from renegotiations is nowhere to be seen.

“The various price deductions that were announced by Nepra were all time-bound till June. Therefore, if base tariff is not decreased from July 1, 2025 the tariff may increase by Rs 5-6 after the benefit of negative QTA and FCA will be over,” Amir Sheikh said.

Chairman Nepra Waseem Mukhar directed Power Division to look into the viewpoint of industry, especially with recent poor quality of power supply from Discos, which is an irritant for industry and to provide future projections of power rates so that industry can make its plans accordingly.

Mehfooz Bhatti, Additional Secretary Power said that abrupt suspension of supply is a serious issue and he would look into it through Power Planning and Monetary Company (PPMC).

Arif Bilwani said that hydrology assumptions are very critical as we are facing substantially reduced water flows because of draught like conditions. Nepra has already directed the CPPA to prepare report and share and requested that the report be displayed on Nepra website.

“GDP growth figure is also on higher side as the World Bank has revised its projections downward from 2.8% to 2.7%. Demand growth is also not reflecting ground realities. Consistent decline in industrial demand particularly from LSM is being reported for the last 1 1/2 years, he added.

“Benefits of renegotiation with IPPs and GENCOS is not being reflected in Capacity Payments. Further increase in CPP (Rs. 60 billion) will accrue due to Jamshoro imported coal power plant. There is no mention/impact of renegotiation with the left out IPPs, GENCOs & Chinese power plants,” Bilwani argued.

Kibor has been assumed at 11.9% although it is expected to be further reduced during the year reaching single digit. Inflation has been assumed at 8.65% which is extremely high, although the country is already witnessing, as per GOP, the lowest inflation in decades. There is a need to readjust the two figures.

Bilwani further stated that the impact of solar Net Metering has not been properly accounted for in the assumption and requires to be looked at.

 

The representative of Punjab Power Board enquired as to what was the financial impact of renegotiated IPPs and have the PPAs been made part of the assumption as projections of capacity payments are the same as last year.

Naveed Qaiser responded that government had projected Rs 4 trillion reduction in capacity but reduced it to Rs 2 trillion to 2.4 trillion due to COD of Jamshoro Power Plant which will cost Rs 60 billion and Shahtaj Sugar Mills.

Member KPK, enquired as to how much will the industrial tariff be reduced? The representative of CPPA-G stated that electricity rates can be reduced from 1 per cent to 8 per cent.

According to Qaiser, projections for GDP growth, inflation, and interest rates are based on input from IFIs, Finance Division and other relevant entities.

Nepra Chairman Waseem Mukhtar instructed the Power Division to take the concerns of industry seriously, particularly regarding poor service quality from Discos and future power pricing so industries can plan accordingly.

Bhatti acknowledged that sudden power interruptions are a major issue and added that there is a commitment to addressing them through the PPMC.

Tanveer Barry, representative from KCCI Karachi said that the projected power purchases ranges between Rs 24.75/kWh and Rs 26.22/kWh is still very high. This level of tariff undermines industrial competitiveness and increases the cost of doing business and may deter export growth.

He further argued that the government claimed that it has saved trillions of rupees through negotiated agreement but capacity charges are still very high. In Pakistan industrial sector is paying almost double the electricity price as compared to other regional countries. Time of Use power tariff structure for industrial consumers should be abolished. Industrial consumption is declining because of expensive electricity. Expensive power plants should be shut down and replaced with efficient power plants and renewable energy.

Rehan Jawed stated that the government should take a decision on net metering otherwise it will be become a big issue for the power sector like IPPs issue.

The representative of Aptma, Amir Riaz criticised the planners for making irrelevant decisions. He proposed integrated approach to reduce electricity rates for the industry.