NewsDaily
Oil on track for weekly loss even as
Iran tensions simmer
Oil prices fell on Friday and
are on track to snap a two-week winning streak, despite settling higher
in the previous session following a report that U.S. President Donald Trump
is not interested in returning to previous deal terms with Iran.
Brent crude futures were down 25
cents, or 0.3%, to $89.45 a barrel
by 0035 GMT. West Texas Intermediate crude futures fell 22 cents,
also 0.3%, to $83.31.
Both benchmarks were poised to
end the week lower, with Brent down 5.3% and WTI falling 4.3%.
Citing people familiar with the
matter, the Wall Street Journal report said the Trump administration
has repeatedly told mediators it has no interest in reviving the June
memorandum of understanding, complicating diplomatic efforts to restart
talks.
Earlier on Thursday, Washington
said it was not in talks with Iran despite diplomatic efforts by other
countries to re-engage the two sides.
On Monday, the U.S. announced
what it called the "toughest sanctions in history" on Iran.
Tehran said the sanctions were an "inhumane and hostile act"
that had lost their effectiveness.
Elsewhere, geopolitical tensions
escalated after Moscow warned it could strike British military targets
inside and outside Ukraine in response to Kyiv's attacks on Russian
territory using British-supplied long-range cruise missiles. Trump,
however, said Russian President Vladimir Putin will not attack a North
Atlantic Treaty Organization (NATO) country, and he downplayed media
reports that CIA Director John Ratcliffe this week had warned Russian
officials against such an attack. Britain is one of the founding members
of NATO.
📌 Brief Summary:
Oil prices are set to snap a two-week winning streak, with Brent down 5.3% for
the week to $89.45, after reports the Trump administration has no interest in
reviving the June US-Iran memorandum. The US also imposed its "toughest
sanctions in history" on Iran, while unrelated Russia-NATO tensions added
to broader geopolitical uncertainty. 📈 Company Impact:
Mildly positive for Pakistani OMCs and IPPs if the oil price decline persists,
easing import costs; still a watch-item given the fragile and unresolved
US-Iran diplomatic standoff.
PM appreciates Saudi Arabia's
steadfast support for Pakistan
Prime Minister Shehbaz Sharif has reaffirmed Pakistan's deep appreciation for the
Kingdom of Saudi Arabia's steadfast support and generous assistance to Pakistan,
as well as its pivotal role in promoting peace and stability in the region.
The prime minister was speaking to
the outgoing Ambassador of the Kingdom of Saudi Arabia, Nawaf Bin Said Al
Malki, who paid a farewell call on him at the PM House. The prime
minister congratulated the Saudi ambassador on the successful completion of
his official assignment and lauded his outstanding contribution towards
further strengthening the deep-rooted fraternal and strategic ties between
Pakistan and Saudi Arabia.
Also conveyed his warmest regards
and best wishes for the health and well-being of the Custodian of the
Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and Prince Mohammed
bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister of the
Kingdom of Saudi Arabia.
Ambassador Al-Malki expressed profound
gratitude to the prime minister and the Government of Pakistan for the warmth,
cooperation and hospitality extended to him throughout his assignment. He
described his stay in Pakistan as a deeply memorable and rewarding
experience and reaffirmed his personal commitment to the continued
strengthening of Pakistan-Saudi Arabia relations.
The prime minister wished the
ambassador continued success in his future endeavors.
📌 Brief Summary:
PM Shehbaz Sharif thanked outgoing Saudi Ambassador Nawaf Bin Said Al Malki for
his contributions to Pakistan-Saudi relations during a farewell meeting,
reaffirming Pakistan's appreciation for Saudi support and regional stability
efforts. 📈 Company Impact:
No direct listed-company impact; a routine diplomatic courtesy call with no
immediate market relevance.
IMF opposes gas price reduction
The International Monetary Fund
(IMF) is seeking to curtail powers of the federal government for making
a downward revision in gas prices in a bid to prevent further
accumulation of circular debt.
In a recent meeting, the Cabinet
Committee on Energy (CCOE) was informed that the IMF, while noticing the burgeoning
tariff differential adding to the flow of circular debt in the gas
sector in its review of the Extended Fund Facility (EFF) and Standby
Arrangement (SBA) from time to time, sought amendments to the Ogra
Ordinance 2002 to curtail powers of the government for pushing down
tariffs.
Later, a commitment was solicited
with set deadlines to timely advise the revision in consumer gas prices
following receipt of Ogra determinations and report compliance to the
IMF.
Pursuant to the IMF's demand, the Ogra
Ordinance 2002 was amended in March 2022 through an enactment. It was also
agreed that prices would be timely revised in accordance with Ogra
determinations to avoid further accumulation of circular debt. Also,
the diversion of re-gasified liquefied natural gas (RLNG) to the domestic
sector was allowed with cost recovery through price revisions starting
November 2023.
Unlike the power sector where
subsidy is budgeted by the government to address the tariff differential,
the gas sector has operated under a cross-subsidy mechanism to protect
the vulnerable/poor segment in the domestic (residential) sector,
which inflated tariffs for other consumer categories to meet revenue
requirements of gas distribution companies. The absence of budgeted
subsidies has limited the ability of public gas utilities to lower
tariffs for industrial, commercial or compressed natural gas (CNG)
consumers.
Pakistan's gas supply chain
comprises two major segments – the input cost of gas or the wellhead price
under the applicable petroleum policies and the end-consumer tariff.
The determination of consumer tariff is the exclusive jurisdiction of
the federal government under the Ogra Ordinance and the rules made
thereunder.
In line with the existing regulatory
regime, Ogra, on a biannual basis, determines and notifies
both wellhead gas prices as per the applicable petroleum policy and
the revenue requirements of Sui companies, which serve a larger part of bulk
and retail consumers connected to their pipeline networks.
Once Ogra determines the annual
revenue requirements of Sui companies, it refers the decision to the
federal government for advice within 40 days for issuing a notification.
The practice of revision in consumer gas prices in alignment with Ogra's
biannual determination was strictly followed until financial year 2013;
thereafter, it was neither followed nor any provision for tariff
differential subsidy ever made in the annual budget.
On a similar analogy, the tariff
differential in ring-fenced RLNG sales arose starting FY 2018-19
after the government decided to divert RLNG to the domestic sector to
meet winter gas demand without any firm mechanism for recovery of the
actual cost of RLNG. The Petroleum Division, through advisory firm KPMG,
got a review conducted in 2024 of the cash flow and circular debt
position in the gas/RLNG supply chain. The consultant in its final
report, submitted in October 2024, confirmed that a major component
in the gas-sector circular debt was the tariff differential, which arose
due to lower consumer prices.
As of June 30, 2025, the gas-sector
circular debt was reported at Rs3,288 billion (including interest cost
of Rs1,468 billion). Under the IMF's EFF and SBA, the government
agreed to take the following steps:
(i) Devise a precise definition
of circular debt for the gas sector; (ii) compile detailed and verified
circular debt stock statistics; (iii) establish a monthly debt flow
reporting system; and (iv) devise a CDMP (circular debt management plan).
Salient features of the CDMP will
include regular adjustments of end-user gas prices as per established
formulas (and in line with the Ogra Amendment Ordinance effective since
March 2022) and tangible cost-reducing reforms including measures to
slash unaccounted-for-gas (UFG) losses.
The Petroleum Division under non-lending
arrangements requested the World Bank to assist according to the IMF's
understanding, especially in preparing a definition of the gas circular
debt, compiling the gas debt stock and establishing a reporting
system. The World Bank, after months of consultations/meetings,
data analysis and building on the work done by KPMG, helped the Petroleum
Division in coming up with a precise definition of the gas circular debt
and the debt reporting tool, which was handed over to Sui companies
in May 2025.
A significant proportion of indigenous
gas supply comes from state-owned exploration and production (E&P)
companies, including Oil and Gas Development Company, Pakistan Petroleum
and Government Holdings Private Limited. The government holds the first
right to purchase all domestically produced natural gas through its nominated
buyers, ie, Sui distribution companies. Such gas is supplied onwards
either through the distribution companies or directly to power and
fertiliser plants.
Due to lower-than-expected bill
collections by Sui Southern Gas Company and Sui Northern Gas Pipelines,
coupled with power-sector issues, the gas-sector circular debt is
steadily increasing and affecting the financial capacity of E&P
firms to invest in their core business. If the problem of receivables
is not addressed urgently, these companies may suffer losses and
become a burden on the national exchequer.
It may be recalled that the prime
minister had constituted the Committee on Implementing Structural Reforms in
the Petroleum Sector. The committee finalised and shared its report
with the PM Office on November 13, 2025. It also formulated a circular
debt settlement plan, which envisaged settlement of Rs1,493 billion over
a period of five years. The proposed settlement plan was presented to
the PM on December 31, 2025.
📌 Brief Summary:
The IMF is pushing to limit the federal government's power to cut gas prices,
seeking Ogra Ordinance amendments to curb circular debt, which stood at Rs3,288
billion as of June 2025. The government has committed to a formal circular debt
management plan (CDMP) with regular price adjustments and UFG loss reduction
targets under World Bank assistance. 📈 Company Impact:
Positive for E&P companies (OGDCL, PPL) via improved receivables recovery
prospects if the CDMP succeeds; constrains SSGC and SNGPL's ability to offer
price relief, keeping pressure on their circular debt exposure.
Single gas price for all consumers
needed as existing slab system needs review: petroleum minister
Petroleum Minister Ali Pervaiz Malik on Thursday stressed the need to transition to a single
fair gas price for all consumers, saying that the existing system of
slabs needs to be revisited.
According to a statement issued by
the Petroleum Division, Malik chaired a meeting with the SSGCL
chairman and Board of Directors, managing director and senior management in
Karachi to review the company's performance, key achievements,
operational challenges and future reform priorities.
Malik highlighted that gas prices
had not been increased for the past year, while the increase in gas
circular debt had nearly been stopped, describing these as important
progress towards stabilisation of the gas sector.
The minister said the existing
system of gas subsidies through pricing slabs needed to be revisited. He
emphasised the need to transition to "a single fair gas price for all
consumers", while protecting vulnerable segments through targeted
social protection programmes.
According to the statement, Malik
said the transition would spur greater economic activity while reducing
the migration of customers to alternative fuels.
The statement said that the minister
had directed the Board of Sui Southern Gas Company Limited (SSGCL) to
develop a comprehensive strategy and sustainable business model focused on controlling
Unaccounted-for-Gas (UFG) to transform the company into a financially
viable organisation, with public service as the foremost priority.
The meeting was informed that SSGCL
had significantly improved its gas distribution system, with UFG reduced
by approximately 57% in volumetric terms, the statement said. It was also
informed that there was no gas load-shedding for K-Electric, industrial
consumers and fertiliser plants, while domestic consumers were being
provided gas three times a day.
He also directed the SSGCL board
to formulate a comprehensive business reform strategy focused on making
the company self-sustaining, improving operational efficiency and human
resource capabilities, reducing losses and gas theft, strengthening
revenue recovery and ensuring better utilisation of resources.
Secretary Petroleum emphasised that the board operated independently in
accordance with the spirit of the State-Owned Enterprises (SOE) Act.
He said the board should exercise
its mandate and take all necessary measures required for the "betterment,
efficiency and long-term sustainability" of SSGCL.
Malik said the government was
already working with the World Bank on comprehensive gas sector reforms
aimed at addressing structural challenges and creating a more
efficient, sustainable and financially viable gas sector.
Discussing the situation in Balochistan,
the SSGCL board welcomed the constitution of the Political Committee
under the deputy prime minister to look into the province's
challenges and appreciated the initiative as a positive step
towards addressing longstanding issues in Balochistan.
Malik directed that gas supply
issues in Balochistan be resolved on a priority basis, alongside addressing
technical challenges, infrastructure constraints and gas theft.
He stressed the need for sustainable
solutions to improve gas availability and service delivery in the province.
The minister added that "public
service must remain the top priority" in all operational, financial
and strategic decisions while pursuing reforms to ensure the long-term
sustainability of the company.
📌 Brief Summary:
Petroleum Minister Malik proposed transitioning to a single fair gas price for
all consumers, replacing the current slab-based subsidy system, while noting
gas prices have been frozen for a year and circular debt growth has nearly
stopped. He also directed SSGCL to develop a sustainability strategy after
achieving a 57% reduction in UFG losses. 📈 Company Impact:
Positive for SSGC's long-term financial viability if UFG reduction and reform
continue; a shift to a single gas price could raise costs for lower-slab
residential consumers but improve utility revenue recovery, benefiting
fertilizer plants and industrial gas consumers with predictable pricing.
WB-backed gas sector reforms in
focus
Federal Minister for Petroleum Ali
Pervaiz Malik has directed the board of Sui
Southern Gas Company (SSGC) to develop a comprehensive strategy and
sustainable business model with special focus on unaccounted-for-gas
(UFG) loss control to transform the company into a financially viable
organisation.
In a meeting with the chairman,
managing director and senior management of SSGC in Karachi, the minister reviewed
the company's performance, key achievements, operational challenges and future
reform priorities. The management highlighted a significant improvement
in the company's gas distribution system, with UFG reduced by 57% in
volumetric terms.
The meeting was informed that there
was no gas load-shedding for K-Electric, industrial consumers and fertiliser
plants, while domestic consumers were being provided gas three times a
day. Malik observed that gas prices had not been increased for the past
one year, while the increase in gas circular debt had almost been
stopped, marking significant progress towards stabilisation of the gas
sector.
The minister said that the existing
system of gas subsidies via pricing slabs needed to be revisited. He
emphasised the need for transitioning to a single fair gas price for all
consumers, while vulnerable segments be protected through targeted
social protection programmes. This transition will spur greater economic
activity while preventing migration of customers to alternative fuels.
The minister said the government was
already working with the World Bank on comprehensive gas-sector reforms,
aimed at addressing structural challenges and creating a more
efficient, sustainable and financially viable gas sector.
📌 Brief Summary:
(Duplicate coverage of the SSGCL reform meeting) — Petroleum Minister Malik
reiterated the push for a single fair gas price and directed SSGC to develop a
UFG-focused sustainability strategy, with World Bank support for broader gas
sector reforms. 📈 Company Impact:
Same as above — positive for SSGC's financial trajectory; supportive for
gas-dependent industrial/fertilizer consumers if reforms stabilize supply and
pricing.
MPs warn against long-term energy
contracts
Parliamentarians and energy experts have called on the government to avoid long-term energy
contracts that could trap Pakistan in costly take-or-pay obligations
and contribute to circular debt, urging instead a more flexible
approach to LNG and other fuel imports as solar rapidly reshapes the
country's energy landscape, a statement said on Thursday.
In just a few years, and largely
without public subsidy, Pakistan has deployed an estimated 50 GW of
solar capacity across utility-scale, net-metered, agricultural, off-grid
and behind-the-meter systems. The capacity is estimated to generate
roughly 54.75 TWh annually, equivalent on a gross energy basis to nearly
1,279 MMCFD of gas-fired generation.
The discussion took place at a
dialogue titled "The Sun and the Pipeline: Energy Contracts in an Era
of Solar Disruption in Pakistan," convened by the Parliamentary
Forum on Energy and Economy at Serena Hotel, Islamabad.
Dr Nafisa Shah, Convener of the
Parliamentary Forum and Member of the National Assembly, said Pakistan must rethink its energy mix and
regulatory frameworks in light of the rapid deployment of solar energy.
"Pakistan has deployed an estimated 50 GW of solar capacity across its
rooftops and other segments. Our energy policies must reflect this new reality
and ensure that people finally receive the affordable energy they have missed
for so long," she said.
"We are not simply choosing
solar over LNG. We are looking for a flexible, competitively priced energy
layer that ensures security without penalising the progress Pakistan has
made in distributed generation."
Barrister Danyal Chaudhry,
Parliamentary Secretary for Information and Broadcasting, said the debate should move beyond viewing solar and
gas as competing alternatives. "We should ask how the sun, the
pipeline, the grid and emerging technologies can work together to provide
Pakistan with affordable, reliable and secure energy," he said.
Muhammad Arif, former Member Gas at
the Oil and Gas Regulatory Authority (Ogra),
emphasised the need to integrate energy governance and monetise
surplus solar generation.
Asim Riaz, Energy Advisor at the
All-Pakistan Textile Mills Association,
said Pakistan's LNG challenge was no longer solely about securing supply.
"Pakistan's LNG challenge is about demand, flexibility, affordability
and market design. The sun has not eliminated the need for LNG. It
has changed when RLNG is needed, how much is needed, and what kind of LNG
portfolio Pakistan can afford," he said.
Energy journalist Seb Kennedy
noted that Pakistan was experiencing a consumer-led energy transition faster
than the state's planning system could adapt, driven by high tariffs,
unreliable supply and falling solar costs.
Syed Faizan Shah, Energy Expert and
Advisor to the Power Minister,
said Pakistan's priority should be building an energy system more resilient
to external price shocks and more efficient across generation,
transmission and distribution.
Expanding indigenous solar
generation, supported by battery energy
storage and other modern technologies, can improve system flexibility
and reliability, reduce losses, optimise existing infrastructure and provide
consumers greater protection against international fuel price fluctuations,"
he said. The dialogue was attended by parliamentarians, experts, civil
society and academia.
📌 Brief Summary:
Parliamentarians and energy experts warned against locking Pakistan into
long-term LNG take-or-pay contracts, given the rapid, subsidy-free deployment
of ~50 GW of solar capacity generating roughly 54.75 TWh annually. Speakers
called for a more flexible, demand-responsive LNG strategy alongside continued
solar and battery storage expansion. 📈 Company Impact:
Negative long-term signal for LNG-linked entities (Pakistan LNG Limited, SNGPL,
SSGC) given policy momentum toward flexible/reduced long-term gas contracts;
positive for solar and battery storage-linked businesses and net-metering
equipment suppliers.
ADB okays $400m regional border plan
The Asian Development Bank (ADB)
has approved a $400 million regional financing facility to modernise
border crossing points, lower transport and logistics costs, and improve
the movement of people and goods across the Central Asia Regional
Economic Cooperation (CAREC) region, the bank said on Thursday.
The Border Upgrades for
Integration, Logistics, and Development (BUILD) facility will support priority
investments to modernise border crossing points and strengthen
connectivity and competitiveness across the region. "Borders are not
just checkpoints. These are gateways to create jobs, regional markets, and
income opportunities," said ADB Director General for Central and West
Asia Leah Gutierrez.
Border crossing points remain
bottlenecks across CAREC corridors due
to growing trade volumes, infrastructure constraints, and the need for further
modernisation of border management systems. These constraints cause economic
losses for transport operators, traders and passengers. BUILD will
finance priority border investments across CAREC countries,
including upgrades to rail and road crossing points. The facility will
support modern infrastructure, digital systems and high-tech inspection
equipment to reduce crossing times and costs.
BUILD will also strengthen institutional capacity, support
transport reforms and promote private sector participation, creating
opportunities for micro, small and medium-sized enterprises to participate
in regional trade.
📌 Brief Summary:
The ADB approved a $400 million BUILD facility to modernise border crossing
infrastructure across the CAREC region, aiming to reduce logistics costs and
improve trade connectivity, including rail and road upgrades and digital
inspection systems. 📈 Company Impact:
Mildly positive for Pakistani logistics, transport, and cross-border
trade-linked companies if Pakistan participates in CAREC-funded border
modernisation, though direct listed-company beneficiaries are not yet
specified.
SBP reserves edge up $17m to $17.1b
Pakistan's total liquid foreign
exchange reserves inched up to $22.59 billion in the week ended August
21, 2026, the State Bank of Pakistan (SBP) reported.
The reserves held by the central
bank rose by $17 million to $17.10 billion while the net reserves with
commercial banks increased to $5.49 billion. Total foreign currency
deposits stood at $22,587.4 million, compared with $22,506.1 million a
week earlier.
SBP's holdings have hovered near
$17.1 billion through August after falling from $18.38 billion at the
end of June on debt repayments.
Furthermore, the Pakistani rupee
closed at 277.51 against the US dollar in the inter-bank market on
Thursday, up Rs0.01 from Tuesday's finish at 277.52. Inter-bank trading
was shut on Wednesday for Eid Milad-un-Nabi.
Globally, the dollar stayed near
an eight-day high after US inflation and other data slightly raised
bets on a Federal Reserve rate hike. Local dollar supply from
remittances was enough to keep the rupee almost unchanged.
Meanwhile, gold fell Rs3,500 per
tola in Pakistan after international prices retreated from a three-month
high. Local dealers followed the overnight drop in New York, while silver
moved the other way.
The All-Pakistan Gems and
Jewellers Sarafa Association quoted 24-carat gold at Rs483,036 per tola,
down Rs3,500. Ten-gram gold was at Rs414,125, down Rs3,001. Silver
rose Rs50 to Rs7,329 per tola.
Sarafa markets were also closed on
Wednesday. On Tuesday, gold had slipped
Rs600 to Rs486,536 per tola.
Spot gold was last down 1.3% at
$4,595.93 an ounce by 1:57 pm EDT, after touching
its highest level since May 14 on Tuesday. US gold futures settled 0.9%
lower at $4,653.30.
Prices extended losses after US
inflation data, coupled with PCE readings, came broadly in line
with forecasts. That firmed bets on a possible Federal Reserve rate
increase next month. Traders were also waiting for Fed Chair Kevin
Warsh's first major Jackson Hole speech on Friday.
Interactive Commodities Director
Adnan Agar said gold was only slightly
lower on the day. He put the session's low near $4,565-$4,607 and
the high around $4,640. "It is slightly downward," he said.
"There is important data coming this weekend. Tomorrow (Friday), the US is
hosting the Jackson Hole conference for central bank governors. We may get some
hint about future monetary policy for the US and globally."
US employment reports are due next
week. Agar said the broader backdrop
for gold remained supportive, pending those events. Iran and Oman were
still working on an accord relating to the Strait of Hormuz, another
factor markets had been watching for oil and safe-haven flows.
📌 Brief Summary:
SBP's FX reserves inched up $17 million to $17.10bn as of August 21, with total
liquid reserves at $22.59bn, supported by steady remittance inflows keeping the
rupee nearly flat at 277.51/USD. Gold prices in Pakistan fell Rs3,500/tola
tracking a global pullback ahead of the Fed's Jackson Hole conference. 📈 Company Impact:
Neutral-to-mildly positive for currency stability and banks; gold price
movements are relevant for listed jewellery/gold-trading businesses but not a
major market driver.
Nepra weighs Rs2.52 per unit
surcharge
Pakistan's electricity consumers
could be asked to absorb Rs36.54 billion in higher fuel costs in September
bills after the power regulator reserved its decision on a proposed
Rs2.52 per unit surcharge for July, with costly imported fuel driving a
sharp rise in generation expenses.
The National Electric Power
Regulatory Authority (Nepra) on Thursday reserved its decision on
the Central Power Purchasing Agency-Guaranteed's (CPPA-G) request.
CPPA-G, representing the distribution companies, said actual
fuel costs rose to Rs9.6112 per unit in July from a reference cost of
Rs7.0929. It wants the difference recovered from consumers through
the monthly fuel adjustment.
The Karachi Chamber of Commerce
and Industry (KCCI) opposed the proposed increase, urging the
government to use local furnace oil instead of expensive LNG where
feasible and to remove the levy on furnace oil.
The chamber warned that consumers
could face a Rs6 per unit increase from September 1, as Nepra considers
a Rs2.518 per unit monthly fuel charge adjustment for July 2026. The
increase could be compounded by a Rs1.52 per unit upward quarterly
adjustment for the second quarter of CY2026. At the same time, the Rs1.98
per unit relief under the first quarter adjustment will expire, adding to
the overall impact on consumers.
The chamber said the government
had lowered the reference value to reduce its subsidy burden, estimating
that around Rs250 billion in subsidy costs had shifted to consumers.
The proposed adjustment contrasts
with July 2025, when consumers received a Rs1.79 per unit refund.
The increase comes as generation
costs surged 38.15% to Rs162.55 billion in July. Generation rose only
7.07% to 15,122 gigawatt-hours. Imported fuel was the main driver. Re-gasified
liquefied natural gas (RLNG) costs more than doubled to Rs47.38 per unit from
Rs22.03 a year earlier, yet RLNG generation fell 33% to 1,629 GWh. Imported
coal generation rose to 2,169 GWh, with its cost increasing to Rs16.33
per unit. Local coal generated power at just Rs10.42 per unit.
📌 Brief Summary:
Nepra is weighing a Rs2.52/unit fuel surcharge for July that could hit
consumers with a combined Rs6/unit increase from September once quarterly
adjustments and the expiry of Q1 relief are factored in. RLNG generation costs
more than doubled YoY to Rs47.38/unit, driving a 38% surge in overall
generation costs despite falling RLNG output share. 📈 Company Impact:
Negative for consumer purchasing power and industrial power costs broadly;
mixed for IPPs (positive fuel cost pass-through, but demand-side risk if
consumers cut usage); local coal-based generation (Lucky Electric, Engro
Powergen Thar) benefits relatively given its much lower Rs10.42/unit cost
versus imported alternatives.
Saudi eyes airport privatization
Saudi Arabia's Asyad Group has expressed interest in participating in Pakistan's
upcoming airport privatisation process and is exploring additional
investment opportunities across key sectors, including the financial
sector, according to a statement from the Ministry of Finance on
Thursday.
Federal Minister for Finance and
Revenue Senator Muhammad Aurangzeb
held a meeting with Asyad Group Chief Executive Ghassan Ahmed Amodi, who
was accompanied by Group Chief Financial Officer Javaid Akhtar, Wafi Energy
Pakistan Chief Executive Zubair Shaikh and other senior officials.
Amodi reaffirmed Asyad Group's
commitment to Pakistan as a long-term investment destination and expressed satisfaction
with its experience in the country. He highlighted Pakistan's importance
within the group's investment portfolio outside Saudi Arabia and shared plans
to further expand its presence.
The finance minister welcomed the
continued interest of Saudi investors in Pakistan and highlighted new
opportunities being opened through the ongoing privatisation process. He
emphasised the importance of attracting credible, long-term investors
and facilitating commercially viable investments across key sectors.
Amodi briefed Aurangzeb on the group's
interest in participating in the upcoming airport privatisation process and
its efforts to bring together Saudi and international partners with relevant
technical expertise. He also shared recent developments in the group's
airport operations and its growing international experience in the
sector.
The meeting also covered Wafi
Energy Pakistan's ongoing expansion and investment plans, including its growing
retail network, storage infrastructure and digitalisation initiatives. The
company briefed the minister on its investments in Khyber-Pakhtunkhwa
and other parts of the country and its plans to further expand its
operations.
Amodi also apprised the finance
minister of the group's interest in exploring additional investment
opportunities in Pakistan, including the financial sector, and in bringing
further Saudi and Pakistani investors together for potential projects.
Aurangzeb highlighted Pakistan's progress
towards macroeconomic stability, including improvements in key economic
indicators and the country's sovereign credit profile. He noted the
government's continued focus on fiscal discipline, structural reforms
and creating an enabling environment for sustainable investment and
private-sector-led growth.
The finance minister appreciated
Asyad Group's continued confidence in Pakistan and its commitment to
expanding investment. He assured that the government would continue to
facilitate investors and support efforts aimed at strengthening
private-sector participation and promoting investment-led economic growth.
Aurangzeb also highlighted the importance
of Pakistan's strategic location and its potential to serve as a gateway
to regional markets. He encouraged continued collaboration with the
private sector to identify viable opportunities and translate
investment interest into tangible projects.
Amodi appreciated the
government's continued engagement and reaffirmed Asyad Group's
commitment to further investment in Pakistan and to strengthening the
long-standing economic and commercial partnership between Pakistan and
Saudi Arabia.
The meeting underscores the
growing interest of Saudi investors in Pakistan's privatisation and
investment landscape, particularly as the government advances structural
reforms and seeks to attract foreign investment across key
sectors of the economy.
📌 Brief Summary:
Saudi Arabia's Asyad Group expressed interest in Pakistan's upcoming airport
privatisation and broader investment opportunities, including the financial
sector, during a meeting with Finance Minister Aurangzeb. The group's Wafi
Energy Pakistan subsidiary also briefed on its expanding retail and storage
infrastructure investments. 📈 Company Impact:
Positive signal for Pakistan's privatisation pipeline and investor confidence;
directly relevant to Wafi Energy Pakistan's expanding retail/storage footprint
(OMC-adjacent competitive dynamics) and broadly positive for financial-sector
investment sentiment.
Telcos seek grid upgrades for 5G
rollout
Pakistan's 5G rollout is driving
a massive increase in electricity demand, with telecom operators warning
that power grids must be upgraded as consumption at 5G networks is twice
that of 4G.
Jazz, the first telecom operator to link 1,000 sites with 5G,
has called on the government to upgrade power infrastructure to support
the growing demand.
"Electric vehicles and 5G
services have led to higher demand for electricity," Jazz President
Kazim Mujtaba said while briefing media on Thursday.
The company plans to reach 2,500
5G sites by the end of 2026.
Mujtaba added that 5G has
negligible benefit for individual customers, but its key use cases are
for industrial, corporate and government services.
He said damages from accidents
like the recent fire at PIMS Hospital, Islamabad, could be reduced by
implementing "smart buildings" with a 5G bubble as an early
warning system.
"An average of one million
sensors are installed in one kilometre area. If we take the example of
PIMS, the sensor installed in the AC plant will tell beforehand that it
was consuming higher electricity and overheating. After the fire
erupted, all relevant officials would be informed at their phone sets
about any abnormal development," Mujtaba said.
"We have requested upgrading
grid stations as 5G cell sites need more power. The battery
backup has also been upgraded at these sites," he added.
Jazz will invest $1 billion in
network expansion over the next two to three years,
but to reap the benefits of 5G, the government must also invest in
supporting infrastructure, Mujtaba said.
Meanwhile, sources in the Ministry
of IT and Telecom said that while Jazz has linked 1,000 sites with 5G,
the other two operators are lagging behind. Zong has upgraded 350
sites, while the Ufone-Telenor merged entity has only 200.
Mujtaba said the country needs more
5G-compatible handsets. The government and telecom companies are close
to striking a mechanism for providing 5G handsets on instalments. Telecom
companies want to block SIMs of defaulters on all networks if customers
fail to pay instalments, but banks are not ready to take the exposure,
he added.
Jazz officials further said they had faced losses of billions of rupees
due to early closure of markets. They said the government has realised
that interruption in network services is a hurdle to the digital economy,
and there has been no major interruption in internet services after the
spectrum auction.
Responding to a question about the environmental
impact of 5G, they said solar was the best option. About Starlink
and other satellite network companies, they said Jazz was fully capable
of competing.
📌 Brief Summary:
Jazz, Pakistan's 5G rollout leader with 1,000 linked sites (targeting 2,500 by
end-2026), is urging the government to upgrade power grids since 5G consumes
twice the electricity of 4G. The company plans to invest $1 billion in network
expansion but says supporting infrastructure investment from the government is
essential to realize 5G's benefits. 📈 Company Impact:
Relevant for Jazz's parent VEON and other telcos (Zong, Ufone-Telenor) given
significant capex plans and power infrastructure dependency; increased
electricity demand from telecom growth is a secondary demand-side positive for
power generation companies.
Govt reduces petrol price by Rs0.50,
diesel by Rs0.19
The government on Thursday reduced
the price of petrol by Rs0.50 per litre and high-speed diesel (HSD) by
Rs0.19 per litre.
Following the revision, petrol
will retail at Rs342.60 per litre while HSD will cost Rs371.61 per litre.
The government continues to levy Rs114 per litre in taxes and duties on
petrol and Rs100 per litre on diesel.
According to a Petroleum Division
notification, the new prices will be applicable on Aug 28 (Friday).
The price of HSD has come down
from a peak of Rs520.35 recorded on April 3. Its price had started
rising from Rs281 per litre after the US-Iran war broke out on February
28.
The petrol price had peaked at
Rs458.41 on April 3 after beginning its upward trajectory from Rs266
in the first week of March.
Earlier, Petroleum Minister Ali
Pervaiz Malik announced that fuel prices would now be fixed on a daily
basis due to fluctuations in international market prices following renewed
hostilities between Iran and the US.
The government had been announcing
weekly revisions to fuel prices since early March, alongside
measures for the conservation of fuel amid possible oil supply
disruptions due to the ongoing conflict in the Middle East. The
federal government in April also announced targeted relief measures
to provide subsidised fuel.
The petroleum minister stated that
the cabinet and the prime minister had decided to give the Oil and Gas
Regulatory Authority (Ogra) the responsibility of deciding fuel prices
on a daily basis based on international market trends.
Petrol is mainly used in private
transport, small vehicles, rickshaws and two-wheelers, and changes in
its price affect the middle and lower-middle classes.
Similarly, changes in diesel
prices also impact the public at large, as it is mainly used in the heavy
transport sector, power plants and large generators.
Petrol and high-speed diesel (HSD) are the major revenue earners, with monthly sales
of about 700,000 to 800,000 tonnes, compared to just 10,000 tonnes of
monthly demand for kerosene.
📌 Brief Summary:
The government trimmed petrol by Rs0.50 and HSD by Rs0.19 per litre effective
August 28, with prices now well off their April 3 peaks (Rs458.41 for petrol,
Rs520.35 for HSD) reached after the US-Iran war began. Daily pricing,
introduced amid ongoing Middle East volatility, continues to replace the
previous weekly mechanism. 📈 Company Impact:
Mildly positive for consumers and fuel-intensive sectors (transport, logistics)
given the price relief; broadly neutral for OMCs given the marginal size of the
cut relative to the daily pricing mechanism's volatility.
Govt backs $2bn PRL upgrade
Petroleum Minister Ali Pervaiz Malik, accompanied by the petroleum secretary and senior
officials, held a series of meetings with major refineries in Karachi
on Thursday, reviewing ongoing and proposed upgradation projects and assuring
the industry of the government's full support in achieving financial
close and completing the projects.
Adil Khattak, chief executive
officer of Attock Refinery Limited (ARL),
told The News that during his visit to Pakistan Refinery Limited (PRL),
the minister was briefed on its proposed refinery upgradation project,
which is estimated to require an investment of between $1.8 billion and $2
billion.
The project is among the country's most
capital-intensive refinery modernisation initiatives and aims not only
to bring petroleum products up to Euro-5 specifications but also to double
the refinery's production capacity.
He said the project can be implemented
in two phases, although a final decision on its phasing had yet to be
taken. The ministry assured PRL of its support in arranging
financial close and facilitating the company in dealing with overseas
stakeholders, where required.
The minister subsequently visited
Pakistan-Arab Refinery Limited (Parco), where he held detailed
discussions with the company's management on its refinery upgradation
plans and the security of the country's energy supply chain. He also
met representatives of the Attock Group, ARL and National Refinery Limited
(NRL) to discuss their respective modernisation projects, Khattak
said.
During the meeting, ARL management
briefed the minister on its next upgradation project, which aims to bring
its products in line with Euro-5 specifications and increase motor
gasoline production by 25 per cent.
ARL representatives said that, despite being the country's oldest operating
refinery, the facility has become one of the most modern in the country
through successive investments in upgradation over the years. They
expressed confidence that the company will face no major difficulty in
arranging financing for the proposed project because of its strong
financial position.
ARL also urged the government to
finalise the refinery upgradation agreements at the earliest. The company said it has been ready to sign the
agreements for almost two years, but delays on the government's side had
held up the process.
"Despite our reservations, the
company remains willing to sign the agreement as soon as the government
completes the formalities," Khattak said. According to refinery
management, the petroleum minister assured them that the upgradation
agreements will be signed next week, by Friday at the latest.
Refinery representatives appreciated
the minister's role in securing approval of the refinery upgradation policy
and advancing work on strategic petroleum reserves, which Pakistan currently
lacks.
They said the government, under the
minister's guidance, has already commissioned a study by an internationally
renowned consultancy to develop recommendations for establishing and
maintaining strategic petroleum reserves.
The refinery industry also welcomed
the government's decision to introduce daily petroleum product pricing,
describing it as a long-standing industry demand. According to refinery
representatives, the daily pricing mechanism has helped address fluctuations
in product lifting. Under the previous system, oil marketing companies
could increase product purchases ahead of expected price increases while reducing
or delaying lifting when prices were expected to decline.
This often resulted in shortages
or excess inventories and can force refineries to reduce throughput or
shut down units. The new mechanism, they said, will help align
product demand more closely with market conditions and provide greater
stability to refinery operations. The minister also held a meeting with
the Cnergyico refinery team during his engagements in Karachi.
📌 Brief Summary:
Petroleum Minister Malik met with major refineries (PRL, Parco, ARL, NRL,
Cnergyico) in Karachi, backing PRL's $1.8-2 billion upgrade project to double
capacity and meet Euro-5 standards, while assuring ARL and others that upgrade
agreements will be signed by next Friday after nearly two years of delay. 📈 Company Impact:
Major positive for Pakistan Refinery Limited (PRL) given the large-scale
capacity-doubling upgrade backed by government support; also positive for
Attock Refinery Limited (ARL) and National Refinery Limited (NRL) as
long-delayed upgrade agreements near finalization.
PAMA, PAAPAM seek 40pc tariff gap to
protect local auto industry
The Pakistan Automotive
Manufacturers Association (PAMA) and Pakistan Association of Automotive
Parts and Accessories Manufacturers (PAAPAM) have sought a major
revision to the tariff liberalisation framework under the National
Tariff Policy (NTP) 2025-30, arguing that a minimum 40 percentage-point
tariff differential between locally assembled vehicles and imported
completely built units (CBUs) is essential to protect domestic
investment and manufacturing.
The associations have challenged
the NTP's planned reduction in basic customs duties towards global
standards by 2031, saying a sharp reduction in protection could make
imported vehicles from countries such as China and Thailand cheaper than
locally assembled models.
Under their proposals, the combined
duty on CBUs, including customs duty, regulatory duty and taxes,
should remain at least 40 percentage points higher than the applicable
duty on completely knocked-down (CKD) components. They warned that allowing
the differential to fall below this level could force local assembly
plants to halt operations.
PAMA and PAAPAM have also called for
retaining higher duties on locally manufactured CKD components to protect
domestic vendors and employment. Under the previous Auto Industry
Development and Export Policy (AIDEP) 2021–26, duties on localised CKD
parts stood at 45-46 per cent, while the NTP envisages reducing them to
41 per cent by 2031. The industry wants the existing 45-46 per cent rate
retained, arguing that lower duties would weaken protection for
Pakistani parts manufacturers and encourage manufacturers to shift
tooling and related jobs back to foreign suppliers.
For non-localised CKD components,
currently subject to duties of around 30-32 per cent, the NTP
proposes a phased reduction to 25-27 per cent by 2031. PAMA and PAAPAM have
instead proposed increasing the rate to 32–35 per cent.
They argue that higher duties on
imported components will encourage original equipment manufacturers to
localise technically advanced modules, including engines and steering
columns, rather than continuing to rely heavily on imported parts.
The associations have proposed particularly
high tariff protection for imported CBUs across different vehicle
categories. For cars up to 800cc and 1,000cc, where the previous
policy carried a combined duty of around 56 per cent, the NTP is
expected to reduce the total burden to 30-40 per cent. The industry wants
the government instead to maintain a 50 per cent customs duty and impose
a 15 per cent regulatory duty, resulting in a minimum total tariff of 65
per cent.
The stated objective is to prevent
low-cost imported small cars from competing directly with locally assembled hatchbacks.
For vehicles in the 1,001cc to 1,500cc category, the previous
combined import duty was around 81 per cent, while the NTP envisages
reducing it to approximately 59 per cent. PAMA and PAAPAM have proposed retaining
a 60 per cent customs duty and imposing a 30 per cent regulatory duty,
taking the minimum combined burden to 90 per cent.
They said higher regulatory
protection is necessary to maintain a substantial price differential
between imported vehicles and locally assembled sedans. For the 1,501cc
to 1,800cc segment, the previous combined duty stood at around 96 per
cent, compared with an expected 69 per cent under the NTP. The
industry has proposed retaining a 60 per cent customs duty and increasing
regulatory duty to 45 per cent, resulting in a minimum combined burden
of 105 per cent.
The measure is aimed at preventing
imported crossovers from undercutting locally assembled SUVs. The strongest
protection has been sought for vehicles between 1,801cc and 2,000cc. The previous
combined import duty was around 116 per cent, while the NTP's expected
structure will bring it down to approximately 84 per cent.
The industry has proposed retaining
a 75 per cent customs duty, 45 per cent regulatory duty and 30 per cent federal
excise duty, creating a compound burden of more than 150 per cent.
The associations argue that the highest protection is necessary to keep
premium local production viable.
For luxury SUVs above 2,000cc,
including vehicles such as Land Cruiser and Fortuner, the previous
combined import burden was around 206 per cent, while the NTP structure
could result in approximately 216 per cent.
The industry has proposed retaining
a 100 per cent customs duty, 90 per cent regulatory duty and 92 per cent
federal excise duty, taking the compound burden above 282 per cent.
The proposal argues that higher taxation of luxury CBUs will help conserve
foreign exchange reserves.
For light commercial vehicles,
including pickups such as Hilux, Revo and Isuzu D-Max, the NTP
proposes a customs duty of 20-25 per cent plus 4.0 per cent additional
customs duty, resulting in a combined burden of 24–29 per cent.
PAMA and PAAPAM have instead sought
a 30 per cent customs duty and 15 per cent regulatory duty, bringing the
minimum total to 45 per cent to protect local single- and
double-cabin assembly lines.
For buses, the associations
want the existing 20 per cent customs duty maintained, along with a localisation
link requiring imported CBUs to face taxation where a local plant
already manufactures buses with the relevant seating capacity.
For trucks and prime movers,
they have proposed retaining a 20 per cent customs duty and adding a
15 per cent regulatory duty on competing sizes to protect domestic heavy
commercial vehicle assemblers.
The industry has also made several broader
demands of the government. PAMA and PAAPAM have called for a complete
ban on commercial or zero-rated imports of used vehicles by 2030, warning
that such imports could force local plants to close.
They have also proposed linking
new auto assembly licences to mandatory localisation targets, with PAAPAM
suggesting that no new licence should be issued unless the incoming brand
commits to achieving 80 per cent localisation within 36 months of
launching operations.
On the transition towards
electric mobility, the associations have urged the government to adopt a
'Hybrids First' strategy and reject an immediate shift towards battery
electric vehicles (BEVs).
They have proposed maintaining
tax incentives for hybrid electric vehicles (HEVs) and plug-in hybrid electric
vehicles (PHEVs) until 2030, arguing that the approach will provide
greater protection to existing domestic engine assembly capabilities during
the transition.
The counter-proposals effectively
seek to preserve a high tariff wall around Pakistan's automotive
manufacturing base, while using higher duties on imported components and
vehicles to encourage deeper localisation.
The industry's position is that tariff
liberalisation without corresponding domestic manufacturing capacity can undermine
billions of dollars already invested in the sector and put local vendor
employment and assembly operations at risk.
📌 Brief Summary:
PAMA and PAAPAM are pushing back against the National Tariff Policy 2025-30's
planned duty cuts, demanding a minimum 40-percentage-point tariff gap between
CBUs and CKD components across all vehicle categories to protect local assembly
plants. They also want a full ban on used-vehicle imports by 2030 and a "Hybrids
First" strategy over an immediate EV transition. 📈 Company Impact:
Directly critical for listed auto assemblers (Indus Motor Company, Pak Suzuki,
Honda Atlas Cars, Sazgar, Hyundai Nishat Motor) — success in retaining high
tariff protection would be a major positive, directly countering the earlier
NTP-driven used-car duty cut that pressured the sector; also relevant for auto
parts vendors under PAAPAM.
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