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Govt reduces debt rollover risk
Pakistan has met the International Monetary Fund (IMF) condition of increasing the maturity profile of its debt through retiring the short-term borrowing and the government also hopes to strike a $1 billion foreign commercial loan deal in April.

The development came hot on the heels of some improvement in debt indicators, including the expected slowdown in the pace of debt accumulation to single digits after a long time. The debt office, which now directly reports to the finance secretary, has taken certain initiatives to reduce interest rate and debt refinancing risks. Against the IMF's condition of increasing the current average maturity time of debt from two years and eight months, the Finance Division managed to increase it to three years and three months by December, according to data compiled for the IMF review starting from Monday.

The first formal programme review talks between Pakistan and the IMF will begin on March 3 and will continue till March 14. Their successful conclusion will lead to the release of the second loan tranche of about $1.1 billion.

Pakistan's performance in terms of debt maturity is much better than the end-June 2025 target set by the IMF. This has reduced both refinancing and interest rate risks and will also lessen the government's dependence on commercial banks.

The average time to maturity is the weighted average repayment period of the existing debt. The IMF has been pointing to increasing the maturity period to address the risk of rollover.

The maturity target has been achieved by shifting the composition of domestic debt, which stands at Rs49 trillion, to longer-term Pakistan Investment Bonds (PIBs) while reducing reliance on short-term treasury bills (T-bills), said Eraj Hashmi, Director of Debt Office.

He said that the deliberate move not only mitigated rollover risks but also attracted investors, who were seeking stable, long-term returns, reinforcing confidence in Pakistan's debt management strategy.

The finance ministry is also trying to secure a $1 billion foreign commercial loan on the back of a $500 million credit guarantee being given by the Asian Development Bank (ADB). Pakistan has not been able to get a new foreign commercial loan due to its poor rating. As a solution, it will use the ADB guarantee.

Sources said that London-based commercial banks had shown interest and the terms were being finalised. Among these are Standard Chartered and Deutsche Bank. One Chinese bank has also shown interest.

The government has also been trying to raise debt from Chinese markets but it is a lengthy process and now it hopes to raise up to $250 million by next year. Internal assessment shows that Panda Bonds will attract around 3.5% interest rate, which is far lower than up to 8.5% rates for issuing Eurobonds.

The Finance Division has managed to restrict debt accumulation to single digits, helped partially by the reduction in interest rate. In the last fiscal year, there was an increase of Rs8.4 trillion in the debt stock, showing a surge of 13.3%.

The Finance Division's assessment is that the debt accumulation will slow down to less than 9% in this fiscal year and the net increase will not be more than Rs6.3 trillion. It sees the public debt growing to Rs77.5 trillion by June this year.

During the first half of the current fiscal year, Rs2.8 trillion had been added to the debt stock at a pace of 3.9%.

The finance ministry said that it would continue implementing the debt buyback policy and next week it would buy back PIBs. Earlier, it had bought Rs1 trillion worth of T-bills, which resulted in savings of Rs31 billion in interest cost, according to the ministry.

This will continue in the second half of this fiscal year through buying back bonds instead of T-bills.

The ministry said that in the first six months of the current financial year, it retired Rs1.7 trillion worth of debt, reducing reliance on commercial banks. The reason was the upfront payment of Rs2.5 trillion in profit by the central bank.

As a result, the T-bills portfolio decreased Rs1.5 trillion, which will positively impact next year's gross financing needs.

In June last year, banks held 81% of government securities. Now, their holdings stood at 67%.

The finance ministry said that the government had contained external debt since Prime Minister Shehbaz Sharif took office in March last year. Total external debt remained stable at $86.6 billion during the period, showcasing effective debt management and reluctance to take unnecessary debt, it added.

The narrative of Pakistan's debt is no longer one of despair but of determination, discipline and decisive action, said Eraj Hashmi. Through strategic reforms, the government has slowed debt accumulation, he added.

The government also expects to save Rs1 trillion due to interest rate reduction. Against the allocation of Rs9.8 trillion, the cost may hover around Rs8.7 trillion. In the second half, the estimated interest payment is Rs3.6 trillion, said the finance ministry. During the first half, Rs5.1 trillion was spent on interest payment.

The ministry would on Monday undertake the first-ever buyback auction of government bonds. This strategy aligns with international best practices and demonstrates the government's capability to retire debt ahead of maturity.

Govt orders SOEs to disclose assets
The government has instructed the management and boards of all state-owned enterprises (SOEs) to disclose their assets and beneficially owned investments after discovering weak financial transparency and a lack of accountability within these entities.

The instructions were issued after the Central Monitoring Unit — a special cell set up to monitor financial progress and ensure accountability in the public sector — found serious lapses on the part of boards and management. An overwhelming majority of management and board directors were not disclosing their assets, violating an Act of Parliament. Sources said there was hardly any government organisation whose boards and management disclosed their assets and beneficially owned investments. The Ministry of Finance has issued fresh instructions to the boards and management through their respective line ministries.

"As part of ongoing efforts to enhance governance and transparency within SOEs, it is imperative that all SOEs under the administrative control of respective line ministries comply with the provisions of the State-Owned Enterprises (Governance and Operations) Act, 2023," stated an office memorandum issued by the finance ministry.

The memorandum, sent to all SOE boards, mandates compliance with Section 30(1) of the State-Owned Enterprises (Governance and Operations) Act, 2023, which requires the annual disclosure of assets and beneficially held investments and properties. These instructions come alongside a proposal to amend the Civil Servants Act to require public disclosure of assets by members of the 12 occupational groups. However, due to the limited scope of the Civil Servants Act, only about 25,000 individuals would be affected.

The state of affairs in some public sector companies remains concerning, as federal ministers and contractual employees continue to sit on the boards of these companies in violation of the SOEs Act. A contractual employee of the finance ministry is also on the board of the Privatisation Commission, while a federal minister remains a member of Pak-Arab Refinery Limited (PARCO).

While the finance ministry has directed all SOE boards to implement Section 30(1) of the Act, it has yet to enforce this requirement on some of its own employees.

The law states, "The directors and senior management officers of a state-owned enterprise shall annually submit their assets and beneficially held investments and properties to the Board, and any changes thereon shall be reported to the Board within two weeks of such change, subject to such reasonable restrictions on making this information public as may be imposed by the Board in its conflict management policy." The memorandum further highlights that the State-Owned Enterprises (Ownership and Management) Policy, 2023 reinforces principles of financial transparency and accountability. It mandates SOEs to establish governance mechanisms in alignment with the Act to ensure compliance with disclosure and reporting requirements.

The ministry has instructed all boards and management to provide updates on the law and policy's implementation status.

The International Monetary Fund (IMF) has already urged Pakistan to implement a risk-based verification of disclosed civil servant assets, impose penalties, and investigate officers whose assets exceed their declared sources of income.

During one of its meetings, the global lender discussed referring cases of bureaucrats with mismatched assets and income sources to the National Accountability Bureau.

The board of Pakistan Revenue Automation Limited (PRAL) — a key player in the government's Rs3.7 billion plan to modernise the tax machinery's IT arm — has also started operations without first disclosing potential conflicts of interest or developing a code of conduct, a legal requirement.

The non-disclosure of conflicts of interest violates the State-Owned Enterprises Act and the SOE policy — two legal frameworks developed with international financial institutions' assistance to improve governance in state-run entities.

The board has been holding meetings without ensuring that newly appointed members have no direct or indirect conflicts of interest while making key policy decisions.

The CMU's Corporate Governance report noted that despite their critical importance, SOEs in the oil and gas sector face governance challenges, including delayed financial reporting, inefficient governance practices, and weak risk management systems. These issues erode public trust and hinder the sector's ability to contribute effectively to national energy security, as per the report.

Transitioning to a merit-based appointment system is crucial to improving decision-making and reducing inefficiencies, the CMU recommended.

Similarly, the CMU reported that SOEs in the power sector face severe governance challenges, including operational inefficiencies, financial losses, weak financial management, and underperforming boards of directors. These issues have contributed to persistent circular debt, unreliable energy supply, and limited progress in achieving sustainable energy goals.

Boards of DISCOs such as LESCO, HESCO, TESCO, and GEPCO have frequently been criticised for including members with limited expertise in energy management. A merit-based and skill-focused approach to board composition is necessary to strengthen their performance, the report recommended. These findings are based on the situation as of June 2024.

Regarding Development Financial Institutions (DFIs), the CMU report stated that board appointments should be based on professional expertise and experience rather than political affiliations.

Contrary to this advice, the finance ministry is currently filling four vacant positions on DFI boards in violation of policies and the law. A contractual employee or bureaucrat cannot serve as an independent director on a board.

The Central Monitoring Unit also noted that Pakistan International Airlines has frequently been subject to political appointments and decisions that have affected its operational efficiency and profitability. Ensuring independent board appointments based on merit and expertise — rather than political considerations — is crucial to improving governance, it added.

Tax shortfall reaches Rs606b
The tax shortfall has widened to Rs606 billion in just eight months of this fiscal year amid the government's demoralising move to transfer a senior female officer for questioning late-evening orders to fix the national flag on a borrowed vehicle for the finance minister.

While the Federal Board of Revenue (FBR) sustained a colossal shortfall of Rs606 billion against the July-February target of Rs7.95 trillion, it also faced the difficult task of reassuring its visibly frustrated officers due to a highly questionable intervention by the finance minister's staff.

The FBR provisionally pooled Rs7.342 trillion during the July-February period of this fiscal year, showing an impressive growth of around 28%. But it was not enough to hit the International Monetary Fund (IMF)-dictated target of Rs7.95 trillion. This caused a shortfall of Rs606 billion against the target, putting the authorities under pressure.

However, the unusual transfer instructions from the finance minister's office may further complicate the situation within the tax machinery.

The Collector Customs Islamabad, a Grade-20 female officer, was unceremoniously removed on February 26 after she questioned the finance minister's office's irrelevant demand to fix the national flag on a borrowed vehicle at 8:30PM on Tuesday, according to Customs officers. Because of her integrity, she had been posted as Collector Customs around four months ago but was transferred for asking the right question to the finance minister's staff.

It was also not the responsibility of the Collector Customs Islamabad to first provide a non-custom-paid vehicle to the finance minister for his travel to Peshawar and then fix a flag on it, multiple Customs officers told The Express Tribune. The minister went to Peshawar on Wednesday on an official trip. The unceremonious removal of a "very senior officer known for integrity, professionalism, and competence" triggered condemnation from the Officers Association of Pakistan Customs Service on Friday.

Sources said the Collector Customs received directives from the finance minister's office to provide a luxury vehicle for the minister's visit to Peshawar.

The finance minister, who comes from the private sector, has not been using a government vehicle since taking office. However, because of his office staff, Aurangzeb has been pitched against the Customs officers, who blame him for allowing undue intervention by his staff.

Sources said this was not an isolated incident of car requisition, as the finance minister's office staff was also using non-duty-paid Customs vehicles.

They said the Customs Collectorate delivered a vehicle on Tuesday evening. The plan was that the finance minister would travel in his own vehicle while the borrowed vehicle would be used for his escort. However, later that evening, at around 8:30PM, she received orders from the finance minister's office to fix the flag on the vehicle. Sources said the officer questioned the demand, which annoyed the finance minister's office and resulted in her removal.

The staff complained to the minister, who then directed the removal of the Collector Customs, said sources.

Member Customs Junaid Jalil did not respond to a request for comments on the development.

"She was transferred because she had the audacity to tell one of the staffers at the finance minister's office that fixing the national flag would be a difficult task so late in the evening," said a senior Customs officer.

"This reflects a troubling misuse of authority and is tantamount to enforcing a culture of unquestioning and robotic obedience over merit and judgment," reads the press statement issued by the Customs Officers Association on Friday evening. The officers of the Pakistan Customs Service have demanded the "ab initio cancellation of the transfer orders of the senior officer," it added.

The association also protested against the suspension of officers who sought postings at their home stations due to serious personal issues.

The association urged the FBR chairman to take immediate steps to address these pressing issues and expressed its concern that failure to do so would result in further disillusionment among the ranks, according to the statement.

Tax collection

Once again, the government has missed the monthly target of Rs983 billion by a margin of Rs138 billion with only Rs845 billion collected in February—the seventh consecutive month of missed targets.

Against the Rs7.95 trillion target, the FBR provisionally collected nearly Rs7.34 trillion by the end of February.

The FBR collected Rs1.65 trillion more than last year, a significant achievement in an economy growing at less than 1% in the first quarter.

However, the government's taxation measures and assumptions in setting the annual target of nearly Rs13 trillion have put authorities under pressure. The IMF compelled the country to impose new taxes, primarily burdening the salaried class and levying taxes on nearly all consumable goods, including medical tests, stationery, vegetables, and children's milk.

For the July-February period, the FBR missed its targets for sales tax, federal excise duty, and customs duty but exceeded the income tax target.

Details show that income tax collection amounted to Rs3.52 trillion during the first eight months of this fiscal year—Rs835 billion higher than the previous year. The eight-month target was Rs3.25 trillion, which the FBR exceeded by Rs279 billion. Sales tax collection stood at Rs2.53 trillion, Rs284 billion (13%) higher than the previous year. However, the FBR missed the eight-month target by Rs579 billion. The target was Rs3.1 trillion.

The FBR collected Rs467 billion in federal excise duty, Rs124 billion higher than the previous fiscal year.

Despite doubling the duty on cement and imposing excise duty on lubricant oil and the sale of plots and buildings, the government missed the excise duty target by Rs132 billion. The target was Rs599 billion.

Customs duty collection stood at Rs820 billion, up by Rs98 billion. However, the government missed the eight-month customs duty target by Rs175 billion. The target was Rs995 billion.

Negligence in price control not to be tolerated: PM
Prime Minister Muhammad Shehbaz Sharif Sunday said provision of essential items to people at low rates was the government’s top priority and any negligence in this regard would not be tolerated. He said this while chairing a meeting on the supply of sugar and price control here.

The premier said in the previous months, the government had taken strict action against sugar smuggling, which bore fruitful results.

He directed the authorities to take solid steps to control the price of sugar besides taking stern action against the elements involved in its hoarding.

Shehbaz directed preparation of a strategy to ensure the provision of the commodity and other essential items at reasonable rates.

 “The federal and provincial governments should make joint efforts to ensure the provision of essential items to the common man at low rates,” he added.

He said during the holy month of Ramazan, negligence regarding control of prices of essential items would not be tolerated.

The meeting was briefed about the sugar production and that there was its sufficient stock available in the country.

It was informed that fair price shops had been set up to sell sugar at low rates at the provincial level and all possible steps would be taken to completely overcome its smuggling.

Action would be ensured against the illegal hoarding of sugar and work at the district administration level would be taken vibrantly in this regard, the chief secretaries briefed the meeting.

Deputy Prime Minister and Foreign Minister Muhammad Ishaq Dar, Federal Minister for Planning and Development Ahsan Iqbal, Federal Minister for Economic Affairs Ahad Cheema, Federal Minister for Industries and Production Rana Tanveer Hussain, Minister Ali Pervaiz Malik and other high-ranking officials attended the meeting.

The chief secretaries of all the provinces also attended the meeting via video link.

Meanwhile, the Prime Minister’s Ramazan relief package of Rs20 billion has garnered widespread praise across Khyber Pakhtunkhwa (KP), with citizens from all walks of life lauding the unprecedented financial support.

This package, which is the largest ever announced for the holy month of Ramazan, is expected to offer significant relief to millions of poor families across the country.

The package aims to support approximately 4 million deserving families, benefiting about 20 million people, including those in KP.

This move is seen as a substantial increase over the last year’s relief of Rs7 billion, representing a 186% increase.

Politicians, economists, teachers, and civil society members have all voiced their support for the relief initiative, but it has particularly resonated with low-income groups. Workers, farmers, labourers and low-paid employees expressed their gratitude, saying the relief would ease the financial burden during the holy month.

Riaz Khan, a retired schoolteacher, praised the prime minister for his empathy and commitment to helping those in need. “This massive relief package will provide the much-needed assistance to many poor families. It is very positive to see the government prioritizing the welfare of ordinary citizens,” Riaz Khan remarked.

The relief package, which will be distributed within the first ten days of Ramazan, will provide Rs5,000 per family, disbursed through digital wallets.

This financial support is expected to be particularly impactful for daily wage earners, farmers, labourers and small business owners who are struggling with inflation and rising living costs.

Bilal Khan, a local fruit seller, expressed his gratitude for the prime minister for the mega package, calling it important for people in his community.

 “The Ramazan relief package will make a huge difference for people like me who struggle to make ends meet. It will help us buy essentials for our families and observe the holy month with peace of mind.”

Similarly, farmers and small-scale vendors such as Misal Khan, a farmer, Lateef Shah, a hairdresser, and Shahjehan, a bread maker, thanked the prime minister for his timely support.

 “This package will ease our daily challenges and ensure that we can provide for our families during the holy month,” they said.

The Ramazan package has been widely seen as a symbol of solidarity with the masses.

Many believe this initiative will foster a sense of national unity and highlight the government’s commitment to uplifting the most vulnerable sectors of the society.

As the holy month of Ramazan begins, the relief package stands as a beacon of hope for millions, reaffirming the government’s focus on alleviating the financial hardships faced by ordinary citizens.

The people of KP, along with the rest of the nation, have expressed their sincere appreciation for this timely and generous initiative.

Consumer confidence shows improvement
Ipsos Pakistan unveiled its latest Consumer Confidence Index Survey on Friday at a press conference held at Movenpick Hotel, Islamabad, marking the completion of one year of the current government. The survey provides key insights into how Pakistanis perceive the country's economic trajectory and their own financial well-being.

Presenting the findings to an audience of senior journalists, economists, academicians, and representatives from both the public and private sectors, Abdul Sattar Babar, CEO and Managing Director of Ipsos Pakistan, highlighted notable improvements across all key consumer confidence indicators. These include country direction, economic conditions, household purchasing comfort, and investment confidence, all of which have shown positive growth compared to the previous year.

Some indicators even recorded their highest-ever positivity levels since Ipsos began tracking consumer confidence in Pakistan. However, despite these improvements, the overall consumer sentiment remains largely negative, reflecting persistent concerns about economic stability and governance.

Babar emphasised that while the data suggests visible progress, a majority of Pakistanis still perceive the economy, job security, and overall country direction as weak. He stressed the need for a coordinated and sustained policy effort to further strengthen public confidence.

Comparing Pakistan's performance to other nations, Babar noted that the country lags significantly behind India and China in consumer confidence levels but remains ahead of Türkiye. This positioning, he said, highlights the structural economic and governance challenges that require long-term attention.

Ipsos conducted the study independently, without external partners or sponsors, ensuring neutrality in its findings. The survey aims to enhance understanding of global and domestic consumer sentiments and their implications.

Govt cuts petrol by Re0.50 and HSD by Rs5.31, effective from March 1
The government has reduced the price of petrol by Re0.50 per litre and high-speed diesel (HSD) by Rs5.31 for next fortnight effective from March 1, 2025.

The new price of petrol will be Rs255.63 per litre while HSD will settle at Rs258.64, according to a notification issued by the Ministry of Finance on Friday.

Moreover, Kerosene oil prices have been lowered by Rs3.53 per litre, bringing the new price to Rs168.12. Similarly, the price of light diesel oil (LDO) has been reduced by Rs2.47 per litre, bringing it down to Rs153.34.

Previously on February 16, the government had reduced the petrol price by Rs1 per litre to Rs256.13 and lowered HSD by Rs4 per litre to Rs263.95.

Centre launches Rs20bn, Punjab Rs30bn Ramazan package
Prime Minister Muhammad Shehbaz Sharif Saturday launched a Rs20 billion Ramazan package, aimed at catering to four million deserving families.

Also, the Punjab government launched a Rs30 billion relief package, delivering direct cash assistance to 3 million families at their doorsteps, according to the provincial information minister.

Speaking at the relief package launching ceremony, PM Shehbaz said that around 20 million people would benefit from the package, which would be distributed in the first 10 days of Ramazan. With the initiative provisioning Rs5,000 deposits to each family via digital wallets, the prime minister expressed satisfaction over the reduced rate of inflation in 2025 compared to the previous figures during the holy month of Ramazan.

“This year, an amount of Rs20 billion has been allocated for the purpose. The relief amount last year was Rs7 billion,” he added.

The premier also lauded all relevant authorities and institutions including ministries, State Bank of Pakistan (SBP), National Database and Registration Authority (Nadra), Benazir Income Support Programme (BISP) and tech companies, who worked day and night to devise a digital mechanism.

The federal government’s initiative would benefit all parts of the country through a well-devised digital system, he added.

He also expressed his gratitude to foreign partners for their partnership and support in this noble cause and appreciated their commitment and valuable contributions.

The PM said billions of rupees of the poor nation had been stuck up in litigation for years and expressed the resolve of the government to get expeditious decisions over Rs500 billion cases pending adjudication in various courts.

He said corruption was being dealt with an iron hand. During their previous interim government’s tenure, the banks had made windfall profits over the fluctuation of dollar rates and got stay orders from the court when the government introduced legislation in this regard.

Referring to a decision of the recent Sindh High Court, he said Rs23 billion were recovered from the disposal of a stay case.

The prime minister termed corruption in the Utility Stores Corporation as the “worst one” and said that it was being privatised, ending public agonies with a very proactive digital system like the one just launched.

He also reiterated to close down other government entities running into losses.

Separately, Punjab Information Minister Azma Bokhari announced that 80 Ramazan bazaars had been established across the province, providing high-quality essential goods at subsidised rates. These bazaars continue to function as per routine, offering staple items such as ghee, sugar, flour, pulses, vegetables, and fruits at prices lower than the open market.

She reaffirmed that the Punjab government had not withdrawn any subsidy and remains committed to ensuring affordability for the public. Currently, all 80 Ramazan bazaars across the province were fully operational. Lahore hosts 10 such bazaars, Rawalpindi 8, while Jhelum, Faisalabad, and Nankana each have three bazaars. Several other districts have also set up Ramazan bazaars to facilitate citizens.

She said the Rs30 billion historic Ramazan relief package would ensure that financial aid reaches deserving and middle-class citizens with dignity and without any inconvenience. She dismissed reports of inflated prices or subsidy withdrawals in Ramazan bazaars as baseless propaganda. She said that these bazaars continue to offer affordable goods, attracting a large number of shoppers who prefer them over the open market due to significant price differences. The public has widely welcomed and appreciated the Punjab government’s efforts to provide essential commodities at reduced prices during the holy month of Ramazan.

Electricity tariffs rebasing plan shelved
The government has shelved its plan to rebase electricity tariffs from January 1 each year, instead of the current July 1 timeline, after the International Monetary Fund (IMF) refused to endorse the scheme, well-informed sources told Business Recorder.

On January 17, 2025, the Economic Coordination Committee (ECC) of the Cabinet had approved the Power Division’s tailored plan aimed at shifting financial shocks onto consumers in winter, when consumption and bills are lower compared to the summer months.

Sources said that while the Finance Ministry had conveyed no objection to the Power Division’s proposal, understanding that it had no financial or subsidy implications, it suggested the Power Division discuss the proposal with development partners, including the IMF, World Bank, and Asian Development Bank (ADB), as part of reform initiatives before submitting it to the ECC.

Significant cut in power tariff likely by end-June

In its summary, the Power Division explained that the National Electric Power Regulatory Authority (NEPRA) determines the consumer-end tariff for the Distribution Companies (Discos) and K-Electric, as per Section 31 of the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2021, read with Rule 17 of the Nepra (Tariff Standards and Procedure) Rules, 1998. The most recent uniform tariff was notified by the federal government via SRO No. 1039(I)/2024 on July 14, 2024.

According to Nepra (Tariff Standards and Procedure) Rules, 1998, and Part 5 of the NEPRA Determination of Consumer-End Tariff (Methodology & Process) Guidelines, 2015, Discos are required to submit their minimum filing requirements for tariff determination by January 31 of each year.

The submission is followed by internal meetings, a public hearing, tariff determination, and notification by the government. Given recent annual tariff determinations, the rebasing has been notified by the government in July each year, with effect from July 1.

Power Division argues that it is an unfortunate coincidence that consumers face high Fuel Charges Adjustments (FCAs) and the annual tariff rebasing simultaneously in the summer months, the Power Division admitted in its proposal.

The Power Division also acknowledged that this tariff increase, coupled with higher consumption, leads to a significant hike in consumer electricity bills during the summer, causing public dissatisfaction and nationwide protests. The Power Division believes the issue could be streamlined by adjusting the timing of the annual re-basing, ensuring stable and sustainable electricity prices throughout the year.

The National Electricity Plan Strategic Directive 8 stipulates that the regulator must revisit the “Guidelines for Determination of Consumer-End Tariff (Methodology and Process), 2015,” to enable the alignment of regulatory proceedings with planning activities, as well as rate and tariff determinations.

After explaining the background of the proposal, the Power Division sought approval from the ECC on the following: (i) Policy guidelines may be issued to NEPRA to revise the annual tariff determination process timelines by amending the relevant legal and regulatory framework so that rebasing is notified with effect from January 1 each year, after completing all regulatory proceedings; and (ii) The Power Division may be authorized to approach NEPRA for implementing these policy guidelines.

However, when the development partners, including the IMF, were consulted on the plan, they did not support it. They recommended that the government focus on ongoing reforms and resolving current issues instead of introducing new initiatives.

Sources further stated that after receiving this discouraging response from the IMF, the plan has been shelved, and the requisite guidelines have not been issued to NEPRA. As a result, the existing rebasing mechanism will continue.

Small renewable energy projects in IGCEP: HEPA seeks PM’s support for inclusion
The Hydro Electric Power Association (HEPA) has sought Prime Minister Shehbaz Sharif’s support for the inclusion of small renewable energy projects of up to 20 MW with Letters of Intent (LoIs) or Letters of Support (LoS) in the upcoming Indicative Generation Capacity Expansion Plan (IGCEP), well-informed sources told Business Recorder.

In a letter to the Prime Minister, Vice Chairman of HEPA, Syed M Hussain Gardezi, emphasized that small-scale renewable energy projects have significant potential to contribute to the country’s energy mix.

These projects can provide sustainable and decentralized power solutions, particularly for remote and underserved areas, reducing line losses due to long-distance transmission lines and enhancing energy security.

However, the current regulatory framework and strict approval criteria often pose challenges for the development of such projects, discouraging local investors and lenders from participating in the renewable energy sector.

HEPA urged the government to consider the following measures to accelerate the transition to a cleaner and more resilient energy system: (i) Relax the stringent criteria for the approval and integration of small renewable energy projects into the national grid ; (ii) Simplify administrative and financial procedures to encourage participation from small businesses, startups, and local entrepreneurs; and (iii) Ensure policy inclusivity by allowing small renewable energy projects up to 20 MW to contribute meaningfully to national energy planning.

Gardezi believes that by adopting these measures, the government can foster a more inclusive and dynamic renewable energy sector, leading to economic growth, job creation, and environmental sustainability. “I hope that you will consider this request and take the necessary steps to promote small-scale renewable energy development in our country. Your leadership in this regard will pave the way for a greener and more energy-secure future for all,” Gardezi said in his letter to the Prime Minister.

The letter comes at a time when the government is about to finalize the IGCEP 2025-35, which currently focuses solely on committed ongoing renewable energy projects or the conversion of imported coal projects to Thar coal.

According to insiders in the Power Division, the government will only accept ongoing projects of about 10,000 MW out of 17,000 MW.

Recently, the Power Division refused to accept 350 MW solar projects from the Water and Power Development Authority (WAPDA) planned to be set up on water in the Tarbela and Ghazi sites. Likewise, hydropower projects from Korean companies are also in limbo due to a sudden shift in government plans.

“I request the Prime Minister to consider the inclusion of small renewable power projects with LoIs/LoS issued by federal entities in the IGCEP, ensuring that these initiatives are not hindered by overly stringent criteria,” Gardezi maintained. Power Minister Sardar Awais Ahmad Khan Leghari has publicly stated, both in recent remarks and in Standing Committees of the Senate and National Assembly, that he would not accept expensive projects. If the government wishes to proceed, these should be funded by the Public Sector Development Program (PSDP), not by consumers.

Last week, Secretary of the Power Division, Dr Fakhray Alam Irfan, acknowledged that Pakistan’s generation capacity will exceed its demand in the coming years.

Rs265.745bn WHT paid in H1FY25: Salaried individuals emerge major contributor to kitty
The salaried class became a major contributor to withholding tax payment during the first six months of 2024-25 paying Rs 265.745 billion during (July-December) 2024-25, reflecting an increase of 59.2 percent as compared to previous fiscal year.

In July-December (2023-24), the salaried individuals paid withholding tax of Rs 166.924 billion.

The data of the Federal Board of Revenue (FBR) revealed that withholding tax payment from contracts, under section 153 of Income Tax Ordinance 2001, stood at Rs 299.267 billion, showing an increase of 25.2 percent.

Salaried individuals: FTO tells FBR to scale back checks on telco-issued certificates

During the period under review, the withholding tax collection from bank interest & securities amounted to Rs 255.352 billion, under section 151 of Income Tax Ordinance 2001, showing an increase of 16.2 percent.

The withholding tax collection from imports stood at Rs 203 billion during (July-December) 2024-25 against Rs 189.349 billion in same period of 2023-24, reflecting an increase of 7.6 percent.

The withholding tax collection from dividends under section 150 of Income Tax Ordinance 2001, totaled at Rs 88.230 billion, reflecting an increase of 55.1 percent.

The electricity bills contributed Rs 84.788 billion in withholding taxes u/s 235 of Income Tax Ordinance 2001, reflecting an increase of 23.1 percent. Major contributors of sales tax at local stage (domestic) during (July-December) 2024-25 revealed that electrical energy contributed Rs 283 billion sales tax (53.5 percent increase); cement, Rs 48.275 billion (47.7 percent increase); sugar, Rs 58.957 billion (26.4 percent increase); Cotton Yarn, Rs43.389 billion (37.2 percent increase) and motor cars contributed Rs14.848 billion in sales tax (domestic) collection during the period under review.

Sales tax collection at the import stage during first six months of 2024-25 revealed that Photosensitive semiconductor contributed Rs98.732 billion sales tax (112.7 percent increase); POL, Rs166 billion (12 percent increase); machinery, Rs72 billion (19.6 percent increase) and vehicles other than railway paid Rs61billion sales tax at the import stage during (July-December) 2024-25.

The major revenue spinners of federal excise duty (FED) during first six months of 2024-25 disclosed that the cigarettes remained out of the top FED contributors during (July-December) 2024-25. The FED collection from Aerated water and cigarettes showed a decline during this period.

The FED collection from cigarettes stood at Rs 102 billion during (July-December) 2024-25 against Rs 105 billion in same period of 2023-24, showing a decrease of 2.4 percent.

Major Federal Excise contributors are cement, Rs71.54 billion; services, Rs19 billion; travel by air, Rs18 billion and fertilizers/urea paid FED of Rs13 billion during this period.

On the import side, sales tax collection showed decline of Rs8.6 billion on the import of oil seeds and oleaginous; Rs3.0 billion decrease in sales tax collection on the import of organic chemicals whereas coffee, tea, mate, and spices imports reflected a decrease of Rs2.0 billion in sales tax collection during (July-December) 2024-25.

In case of customs duty, top items included vehicles other than railway paid import duty of Rs71 billion; machinery, Rs30.434 billion; Photosensitive semiconductor, Rs30.319 billion and Organic Chemicals paid customs duty of Rs7.2 billion during first six months of 2024-25.

Govt entities owe billions of rupees: TCP receivables stand at Rs308bn
The Trading Corporation of Pakistan’s receivables stock stood at Rs 308 billion as of February 28, 2025, due to outstanding payments from various government entities, including the Pakistan Navy.

As a result, the TCP is incurring daily payments in millions of rupees to banks, sources in the Commerce Ministry told Business Recorder.

Of the total receivables, the Utility Stores Corporation (USC) owed Rs 102.262 billion, and the National Fertilizer Marketing Limited (NFML) owed Rs 122.657 billion.

Other major receivables include the Ministry of National Food Security and Research (cotton subsidy) at Rs 2.649 billion, PASSCO at Rs 6.009 billion, Sindh Food Department at Rs 8.910 billion, Punjab Food Department at Rs 16.354 billion, KPK Food Department at Rs 12.308 billion, Balochistan Food Department at Rs 8.834 billion, Government of Gilgit Baltistan at Rs 6.251 billion, Government of AJ&K at Rs 2.1 billion, DGP Army at Rs 1.584 billion, Pakistan Navy at Rs 216 million, Ministry of Industries and Production (on sugar account) at Rs 17.674 billion, and Ministry of Finance (rice) at Rs 194 million.

According to sources, of the total receivables, the principal amount stood at Rs 93.693 billion, while the markup amounted to Rs 214.396 billion as of February 28, 2025. The sources further stated that the commitment from recipient agencies to pay the principal amount along with markup, in the form of written agreements and federal government assurance as per the ECC decision, amounted to Rs 16.831 billion.

Partial payments, accepted by recipient agencies through reconciled and signed minutes or letters, or backed by the ECC decisions, amounted to Rs 72.296 billion.

Outstanding amounts from the federal government, including markup on delayed payments, receivables from the Ministry of Industries and Production for sugar payments as per the Secretaries Committees/ECC decisions, and the remaining disputed principal amounts against recipient agencies, stood at Rs 218.962 billion.

The total value of TCP’s properties, assessed by M/s Joseph Lobo (Pvt) Limited, is Rs 86.280 billion. This includes Korangi Godown (Rs 36.760 billion), Landhi Godown (Rs 7.016 billion), Pipri Godown (Rs 41.089 billion), TCP House (Rs 155 billion), and FTC building (Rs 1.259 billion). TCP’s rental income from its properties for FY 2023-24 was approximately Rs 500 million, with a rental yield of 0.6%.

Sources indicated that the Commerce Ministry and TCP have raised the issue of receivables at various forums, including the Economic Coordination Committee (ECC) of the Cabinet, in an attempt to settle the matter promptly and alleviate the markup on loans raised from banks. However, all efforts in this regard have so far been unsuccessful.

CK Hutchison plans $1bn port investment
Hong Kong conglomerate CK Hutchison Holdings Limited’s ports subsidiary plans to invest $1 billion to upgrade its operations in Pakistan, its Finance Ministry said on Friday.

“Hutchison Ports presented their upcoming investment plan of $1 billion, aimed at upgrading their existing terminals to enhance operational efficiency, logistics connectivity, and automation,” the ministry said in a statement.

e-Trucks into operations: Hutchison Ports leads with investment in green port operations

The investment is expected to generate at least $4 billion in revenue over the next 25 years through royalty, rent, and tax contributions, the statement said, citing a Hutchison Ports delegation.

The announcement followed a meeting between Finance and Revenue Minister Senator Muhammad Aurangzeb and senior executives from Hutchison Ports.

The company has been operating two major terminals in Pakistan over a 25-year period, and has contributed more than 225 billion Pakistani rupees ($805.01 million) in government revenue, the statement said.

The planned investment would automate Hutchison’s services in the southern city of Karachi, where it operates a deep-water container terminal, and improve roads and parking facilities to ease cargo movement.

Pakistan has been trying to attract foreign investment to shore up its low reserves and kick-start its flagging economy.

Ports were identified as one of the infrastructure developments considered vital to draw investment into Pakistan by the head of the World Bank’s investment arm earlier this month in an interview with Reuters. Reuters

Press release adds: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, met with a high-level delegation from Hutchison Ports, led by Andy Tsoi, Managing Director, Middle East & Africa Division. The delegation included Changsu Kim, CEO, South Asia Pakistan Terminal, Navaid Qureshi, CEO, Karachi International Container Terminal, and Taimur Khan Afridi, Head of Government Relations, Hutchison Ports Pakistan. The delegation briefed the Minister on 25-year presence of Hutchison Ports in Pakistan, where they have been operating two key terminals—HPKICT and HPSAPT. Over this period, the company has contributed more than Rs 225 billion in government revenues and has provided employment to a workforce of 5,000 individuals.

During the meeting, Hutchison Ports presented their upcoming investment plan of USD 1 billion, aimed at upgrading their existing terminals to enhance operational efficiency, logistics connectivity, and automation. The investment includes infrastructure development, road improvements to facilitate efficient cargo movement, modernization of HPKICT into a cutting-edge automated terminal, and the development of a 52-hectare logistics park to enhance trade connectivity. Additionally, automation upgrades will include remote quay cranes, automated RTGs, electric trucks, and digitalized gate operations, alongside training programs for maritime professionals in port operations, management, and AI applications.

The delegation highlighted that their investment is expected to generate at least USD 4 billion in revenue over the next 25 years through royalty, rent, and tax contributions. The Finance Minister appreciated Hutchison Ports’ commitment to Pakistan’s maritime sector and acknowledged their significant role in boosting trade and economic activity. He assured them that the government remains committed to fostering a business-friendly environment to attract foreign investment. He reaffirmed the government’s support for strategic investments that contribute to Pakistan’s economic growth and infrastructure development.

Terminal operator demands lease extension
Engro Vopak Terminal Limited (EVTL) has pressed the government to extend the lease of land for a liquefied petroleum gas (LPG) and liquid chemical terminal at Port Qasim to enable it to continue operations.

The government had allocated a piece of land to EVTL at Port Qasim in 1995 and its lease is going to expire in 2026. Now, EVTL is urging the government to extend the lease. However, the Ministry of Maritime Affairs has refused to extend the lease and plans to float a tender for a fresh lease.

EVTL claims it has spent $100 million and intends to continue investing in the project if the government extends the lease agreement.

Interestingly, the extension in lease is not part of the agreement; therefore the maritime affairs ministry is reluctant to endorse it.

Sources said that the Port Qasim Authority (PQA) could not extend the lease of land and it would have to float a tender under the Public Procurement Regulatory Authority (PPRA) rules.

Besides the LPG and liquid chemical terminal, a liquefied natural gas (LNG) pipeline also passes through this land that connects an LNG terminal owned by Engro with Sui Southern Gas Company's network.

Sources said that the matter was taken up in a recent meeting of the Special Investment Facilitation Council (SIFC). The SIFC had set a deadline for the Petroleum Division to complete negotiations with EVTL.

The PQA informed the government about the initiation of another round of negotiations with EVTL by signing the second Supplemental Implementation Agreement on January 15, 2025.

It emphasised that a third-party business valuation of the terminal was necessary, which required additional time. The PQA was of the view that the deadline of January 31, 2025 could not be met due to the extensive due diligence required in the process.

It requested an extension in the deadline to assist in the independent valuation of assets. The government granted extension of another 30 days (until March 2) for finalising ongoing negotiations with EVTL through signing the third Supplemental Agreement. It decided that the Finance Division would facilitate the PQA by providing services for the independent evaluation of assets.

The EVTL terminal for bulk liquid chemicals and LPG is part of Vopak's global network of 78 terminals across 23 countries with total capacity of 36.2 million cubic metres. A joint venture between Royal Vopak (the Netherlands) and Engro Corporation, it has provided storage and terminal services since 1997. Engro Vopak handles over 50% of Pakistan's LPG marine imports and supports major chemical industries by delivering key products like phosphoric acid, paraxylene and ethylene. Its LPG storage capacity had been expanded to 6,700 MT in 2012, with total storage now at 82,400 cubic metres.

 

Oil recovers as upbeat Chinese manufacturing data increases some optimism
Oil prices rose 1% on Monday as upbeat manufacturing data from China, the world's biggest crude importer, led to renewed optimism for fuel demand, although uncertainty about global economic growth from potential U.S. tariffs loomed. Brent crude climbed 76 cents, or 1%, to $73.57 a barrel by 0206 GMT while U.S. West Texas Intermediate crude was at $70.51 a barrel, up 75 cents, or 1.1%.Prices gained after official data on Saturday that showed that China's manufacturing activity expanded at the fastest pace in three months in February as new orders and higher purchase volumes led to a solid rise in production. Investors are eyeing China's annual parliamentary meeting from March 5 for further measures to support its battered economy.
IG market analyst Tony Sycamore said one of the possible drivers for rising prices was "the China NBS manufacturing PMI moved back into expansionary territory over the weekend." However, he cautioned the country's economic outlook may not be inspiring with another round of tariffs on exports to the U.S. set to start on March 4. Analysts from Goldman Sachs were somewhat more positive about the data, saying in a note it suggests stable to slightly better economic activity in China in early 2025, although the imposition of the extra 10% U.S. tariff may prompt retaliatory measures. Last month, Brent and WTI posted their first monthly decline in three months as the threat of tariffs from the U.S. and its trade partners shook investors' confidence in global economic growth this year and reduced their appetite for riskier assets.

Overall sentiment improved following a summit on Sunday where European leaders offered a strong show of support for Ukrainian President Volodymyr Zelenskiy and promised to do more to help his nation, just two days after he clashed with U.S. President Donald Trump and cut short a visit to Washington.

Zelenskiy said on Sunday he believed he could salvage his relationship with Trump but that talks needed to continue behind closed doors. He added that he remained ready to sign a minerals deal with the United States, and he believed the U.S. would be ready as well.

Ongoing attacks at Russian refineries have raised concerns about its refined products exports with another plant in the Russian city of Ufa reportedly on fire. For 2025, analysts are holding their oil price forecasts largely steady, with Brent averaging at $74.63 a barrel, as they expect any impact from further U.S. sanctions to be balanced by ample supply and a possible peace deal between Russia and Ukraine, a Reuters poll showed.

While the U.S. is urging Iraq to resume exports from the semi-autonomous Kurdistan region, eight international oil firms operating there said on Friday they would not restart shipments through Turkey's port of Ceyhan due to a lack of clarity on commercial agreements and guarantees of payment for past and future exports.