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Finance ministry forecasts mild inflation uptick
The Ministry of Finance has projected that consumer price index (CPI) inflation will rise modestly to between 3.0 and 4.0 per cent and 4.0 per cent in June 2025, marking a gradual shift following record-low inflation levels in recent months.

In its Monthly Economic Outlook released on Thursday, the ministry said that inflation is expected to remain between 1.5 per cent and 2.0 per cent in May, before edging up in the final month of the fiscal year.

The report also noted that the Monetary Policy Committee (MPC), responding to a persistent decline in inflation, cut the policy rate by 100 basis points to 11 per cent on May 5, 2025. Broad money (M2) grew by 4.7 per cent between July 1 and May 2 FY2025, compared with 7.0 per cent during the same period last year.

Net foreign assets rose to Rs1,210.5 billion, up from Rs590 billion, while net domestic assets increased by Rs476.2 billion -- significantly below last year’s Rs1,588.3 billion. Private sector credit expanded to Rs751.5 billion, more than triple the Rs239.9 billion recorded during the corresponding period last year.

The KSE-100 index closed April at 111,327 points, down 6,480 points over the month amid geopolitical tensions with India. However, the market has since regained ground in May. Market capitalisation fell by Rs853 billion, ending April at Rs13,521 billion.

The outlook for large-scale manufacturing (LSM) remains subdued, with year-on-year contraction and a recent month-on-month decline suggesting a slow recovery. However, improvements in high-frequency indicators -- such as rising automobile output, increased raw material imports, and a more accommodative monetary stance -- signal cautious optimism. Favourable weather and improved water availability are also expected to support stronger crop yields, contributing to overall economic growth.

The ministry said Pakistan’s economy has been upgraded by Fitch Ratings, citing macroeconomic stabilisation driven by improved fiscal management, a current account surplus and easing inflation.

Revenue growth outpaced expenditure, narrowing the fiscal deficit and strengthening the primary surplus. The current account posted a surplus of $1.9 billion, buoyed by robust growth in exports and remittances. Inflation declined to historic lows, creating room for monetary easing. While LSM activity remained weak, the automotive and export-oriented sectors recorded promising gains.

Climate finance initiatives -- including the IMF’s Resilient and Sustainable Facility and the issuance of Pakistan’s first Green Sukuk -- were highlighted as part of the country’s broader commitment to inclusive and sustainable growth.

Headline inflation dropped to 0.3 per cent year-on-year in April 2025, down from 0.7 per cent in March and 17.3 per cent in April 2024. Month-on-month, CPI declined by 0.8 per cent. Major year-on-year contributors included health (14.1 per cent), education (10.9 per cent), and clothing and footwear (9.1 per cent), while declines were seen in perishable food items (-26.7 per cent), transport (-3.9 per cent), housing and utilities (-2.6 per cent), and non-perishable food (-0.8 per cent). The Sensitive Price Indicator for the week ending May 22, 2025 showed a 0.29 per cent decline, with 14 items registering price drops. During July-March FY2025, total revenue rose by 36.7 percent to Rs13.37 trillion, compared to Rs9.78 trillion in the same period last year. This was driven largely by a 68 per cent increase in non-tax revenue, which reached Rs4.23 trillion, fuelled by central bank profits, petroleum levies, dividends and surcharges. The Federal Board of Revenue collected Rs9.3 trillion in tax revenue during July-April, up 26.3 per cent year-on-year. Expenditures grew by 19.4 per cent to Rs16.34 trillion, with current spending rising 18.3 percent and development spending increasing by 32.6 per cent. As a result, the fiscal deficit narrowed to 2.6 per cent of GDP, down from 3.7 per cent, while the primary surplus rose to Rs3.47 trillion (3.0 per cent of GDP), up from Rs1.62 trillion (1.5 per cent) last year.

The ministry concluded that these results reflect improved fiscal discipline and the effectiveness of ongoing consolidation efforts aimed at supporting macroeconomic stability.

ADB board meets on June 3 to approve $800m Pakistan package
The Asian Development Bank (ADB) has postponed the approval of a $800 million financing package for Pakistan for five days on the request of India that sought time to evaluate the loan documents, exposing flaws in the lender's rule book that allows such extensions.

The government officials told The Express Tribune that the ADB board meeting had been convened for May 28th to approve the $300 million budget support loan and another $500 million in guarantees to obtain foreign commercial loans.

The meeting did not take place on Wednesday and Pakistan had been informed in advance. The meeting has been rescheduled to June 3, the government officials added.

When contacted, Economic Affairs Secretary Dr Kazim Niaz confirmed that the ADB board meeting was scheduled for May 28 but has been postponed for five days on the request of the Indian executive director.

The secretary said that under the ADB rules any director can seek a one-time extension on the date and India took the benefit of this rule. The ADB country office did not respond to a request for comment on the development.

The Indian move came after it failed to block the approval of the $1 billion worth second loan tranche by the International Monetary Fund. The postponement by the ADB underscores that the Pakistani representatives in the World Bank, the IMF, the Asian Infrastructure Investment Bank and the ADB will have to adopt a proactive approach to protect the country's economic interests.

After facing defeat at the hands of the armed forces in the battlefield, India has started lobbying against Islamabad's economic interests. The five-day postponement has not impacted Pakistan's external financing plans and the money is expected to flow in the central bank's accounts after the approval by the board on June 3rd.

Independent economic analysts say that the government should reduce its reliance on the foreign loans, particularly on budget support loans. The ADB's $800 million package is not meant for any development purposes and the money and guarantees will be used to build the foreign exchange reserves.

Dr Niaz said that there was no lapse on part of the federal government or its nominee in the board, as the ADB rules allowed the extension. He said that when India sought the postponement of the board meeting, the government took up the matter at the highest level in the ADB.

The management and almost all the board directors had supported the view point of Pakistan, which resulted in taking the next date for the board meeting, said the secretary.

Pakistan's view was that the international forums cannot be used for settling the political scores of the member countries, he added.

The government had reached an understanding with two foreign commercial banks for a $1 billion loan on the back of the ADB's guarantees due to its low credit rating. The final term sheet and loan disbursement are subject to the approval of the ADB's $500 million guarantee.

Pakistan can borrow up to $1.5 billion foreign commercial loan against the $500 million guarantee, said government sources.

Pakistan's gross reserves stand at $11.4 billion, which the government wants to increase to over $14 billion by the end of June. The reserves will rise on the back of better-than-expected remittances, $1 billion ADB-backed new commercial loan and the refinancing of Chinese loans, the sources said.

The ADB will charge a nominal upfront fee for giving the guarantee. Despite a recent rating upgrade, Pakistan's credit rating still remains low at B negative, which are two notches below the investment grade. Fitch upgraded Pakistan from a substantial default risk to a high risk of default rating.

For the current fiscal year, the government has budgeted $3.8 billion in foreign commercial loans but the disbursements remain low due to the low credit rating. China is expected to refinance the $3.7 billion commercial lending before the end of next month.

The ADB's $300 million policy loan is the second tranche under the Resource Mobilization programme, which the government wants to take for improving the tax collection by the Federal Board of Revenue. However, there has been criticism for taking loans for purposes, which do not require foreign funding.

Pakistan has met all the prior conditions for securing the second loan tranche from the ADB.

The ADB's local office spokesperson had been requested to comment about the change in schedule of the board meeting and whether the ADB can allow its platform to be used by the member countries for achieving their political objectives.

The people privy to the working of the ADB said that any member, including Pakistan, can request a delay for two working days to undertake more due diligence for any loan.

Govt mulls 1.5% tax on imports
In what could become the single largest new revenue source in the budget, the government is considering imposing a 1.5% withholding tax on the value of imports. The tax would be collected by banks at the time of making payments to overseas suppliers.

The measure, still under discussion, will be used as an enforcement tool to curb the widespread under-declaration of import values, a senior government functionary told The Express Tribune. He said that the tax would apply to commercial importers only, who would have the right to claim adjustments against their final tax liabilities.

Currently, commercial importers pay withholding tax when filing goods declarations with the Customs Department. Under the new plan, however, the tax would be deducted when the payment is made to the foreign supplier through banking channels. Sources said the Federal Board of Revenue (FBR) has briefed the International Monetary Fund (IMF) about its proposal to tax imports at three key points: upon arrival, during shipment, and at the stage of payment to exporters. While it remains unclear whether the IMF has endorsed the proposal, the plan appears to be the government's biggest attempt in the budget at hitting the next fiscal year's tax target of over Rs14 trillion.

Finance Secretary Imdad Ullah Bosal on Thursday said there were no plans to delay the budget presentation, reiterating thrice that it would be presented on June 10. Meanwhile, the Annual Plan Coordination Committee will meet on June 3, and the National Economic Council will convene on June 6 to approve macroeconomic and development plans for FY25.

The proposed withholding tax would be deducted at the point of sending money abroad through letters of credit, said the sources. Banks would follow a model similar to how they deduct tax on overseas credit card payments.

FBR spokesperson Dr Najeeb Memon and Chairman Rashid Langrial did not respond to queries on the matter for the purposes of this story.

A recent report by the Policy Research Institute of Market Economy (PRIME), titled 'Combating Illicit Trade in Pakistan', estimates that the country is losing a staggering Rs3.4 trillion annually to black market activities. Of this, nearly 30% stems from misuse of the Afghan Transit Trade facility. These losses amount to 26% of the current fiscal year's total tax target.

The report warns that illicit trade is eroding formal businesses, government revenues, and consumer safety. It highlights outdated border controls, minimal customs automation, a lack of risk-based profiling, and poor scanning technologies as key contributors to rampant smuggling

If passed by Parliament, the new withholding tax could offer the FBR a relatively easy way to collect revenue, especially since it would be implemented through banks. The tax authority has historically underperformed in areas where it must rely on its own enforcement rather than external withholding agents such as banks, provincial bodies, or employers.

The government has previously relied on indirect taxation, including last year's controversial 20% federal excise duty (FED) on the packaged juice industry. The result was a 45% drop in sales, according to Atikah Mir, a representative of the industry. The Fruit Juice Council is lobbying for the FED to be reduced to 15%, arguing that the move would benefit both the industry and revenues. Meanwhile, another tool used frequently by the FBR is blocking genuine tax refunds to inflate revenues.

On Thursday, Special Assistant to the Prime Minister Haroon Akhtar Khan met with a delegation from Utopia Industries to address their pending tax refunds. According to a statement from the Ministry of Industries, Utopia Industries — a leading exporter of mattress covers, pillows, comforters, and plastic products — has been unable to recover more than Rs3 billion (approximately $10 million) despite submitting all required documentation.

The company, which began operations in 2020 with a $50 million investment, now ranks among Pakistan's top 12 exporters by revenue and leads in the number of containers shipped abroad. It is also one of the top two sellers on Amazon, with annual revenues of $170 million. All of its products are branded under its own name and carry Pakistani origin labels, distributed widely across households in the United States, Canada, and the UK.

According to company officials, Rs600 million in sales tax refunds are pending from the April-January period, despite refund payment orders having been generated. An additional Rs700 million in refunds has been deferred for the same period, and Rs350 million in income tax refunds have been stuck since 2022.

Utopia's representatives also met the finance minister in Washington, DC, last October and have filed a complaint with the Federal Tax Ombudsman, but the matter remains unresolved.

The company says it has reached out to multiple stakeholders, including the All Pakistan Textile Mills Association, the Pakistan Textile Council, the commerce and planning ministers, and even the Special Investment Facilitation Council and the Pakistani ambassador to the US yet the issue persists.

Pakistan, ADB push for climate strategy tied to carbon markets
Federal Minister for Climate Change and Environmental Coordination, Dr Musadik Malik, met with an Asian Development Bank (ADB) delegation led by Toru Kubo, Senior Director for Climate Change and Sustainable Development (CCSD), to explore collaboration in carbon markets and shape a new climate strategy.

According to a press release issued Thursday, both sides agreed to formulate a comprehensive, impact-driven strategy with a focus on carbon credit mobilisation, climate innovation, and outcomes-based project implementation.

Malik assured ADB of full ministerial cooperation and active engagement in the strategy's development.

Kubo reaffirmed ADB's support, highlighting the Bank's efforts to help Developing Member Countries invest in low-carbon technologies, boost carbon finance readiness, and access international carbon markets.

Deal to retire power circular debt, slash tariffs on the anvil
The government is on the verge of finalising a major financing arrangement with commercial banks to retire the ballooning circular debt in the power sector, Federal Energy Minister Owais Leghari said on Wednesday.

Unveiling a broad set of energy sector reforms aimed at lowering electricity tariffs, enhancing system efficiency, and fast-tracking the transition to clean energy, the minister told reporters the debt retirement plan “is almost at the conclusion; it’s about to happen and could happen any day now.”

Government has introduced major power sector reforms over the past year, resulting in lower tariffs and a shift towards renewable energy. Industrial tariffs have been cut by 30 percent over the last one year. The government aims to ease consumer burdens and lower tariffs sustainably. Around 18 million household consumers have seen a 50 percent drop in prices.

“We are reviewing agreements with Independent Power Producers and have already seen a decline in electricity prices,” he added. He also criticised past energy policies, saying they were not based on realistic assumptions. “During the COVID-19 pandemic, electricity demand increased, but poor planning in earlier years continues to affect us today.”

Integrating the Bhasha Dam into the national grid will be a major step forward, alongside ongoing reforms in the transmission system, he said adding, “We are trying to ensure consumers don’t suffer due to poor planning.”

Later, speaking with journalists, Leghari said the federal government is preparing a review petition to submit to the National Electric Power Regulatory Authority over K-Electric’s tariffs.

“Our goal is to shield both the federal government and consumers from undue financial pressure,” he said. “We are moving towards privatisation. Instead of relying on handouts, these companies should focus on efficiency and enforce regulatory rules in our Discos,” Leghari said.

He added that regulatory laws must be enforced across all distribution companies and expressed the hope that Nepra would make decisions beneficial to both the country and its consumers.

Leghari said the government has revised the net metering policy after consulting stakeholders. “Once approved, the new net metering framework will be implemented within a month,” he stated.

He acknowledged challenges due to climate change, which has reduced the country’s hydropower generation capacity. “Because of this shortfall, we have had to rely on more expensive power generation sources,” he said.

Nepra defends KE tariff ruling after minister’s criticism
Nepra Chairman Waseem Mukhtar on Thursday responded to Power Minister Awais Leghari’s criticism of K-Electric’s tariff determination, saying during a public hearing, “We’ve given our decision, now it’s up to the minister to respond.” The remarks came during the monthly fuel charges adjustment (FCA) hearing, where the Central Power Purchasing Agency (CPPA-G) sought to increase April’s power tariff by Rs1.27 per unit.

The minister had expressed reservations about Nepra’s decision on K-Electric’s multi-year tariff and recently said that the utility’s tariff should be determined based on “efficiency, not charity.”

Awais Leghari had also announced that the Power Division will approach Nepra to seek a review of this decision. The Nepra chairman, responding to a question during the hearing, reiterated the regulator’s stance: “We’ve given our decision, now it’s up to the minister.”

If the regulator approved the CPPA-G’s request, it would translate into Rs12.93 billion additional burden on consumers for April, citing a steep drop in hydropower generation due to reduced water availability.

Officials from the National Power Control Centre revealed that hydropower output fell by nearly one billion units in April. “The decline in hydro generation is the primary driver behind the proposed fuel adjustment,” an NPCC official explained.

Consumers voiced frustration at the growing electricity costs, questioning the government’s commitment to affordability. “Under the prime minister’s plan, electricity was supposed to get cheaper, not more expensive,” one consumer argued during the hearing.

Arif Balwani demanded transparency on the Neelum-Jhelum Hydropower Project, which he said had consumed Rs500 billion. “Should we now offer fateha for Neelum-Jhelum?” he asked pointedly, pressing Nepra on the status of an earlier directive to compile a report on water availability. Nepra officials said only Wapda could provide accurate details on the project. Despite the requested Rs1.27 hike, CPPA-G official noted the FCA adjustment will apply only for April and will not impact lifeline users, prepaid customers, EV charging stations, or K-Electric consumers.

Responding to a question on the impact of hydropower project shutdowns, CPPA-G’s CEO noted had the Kalabagh Dam been built, Pakistan wouldn’t be facing today’s electricity shortages. “The best-case scenario would have been a functioning Kalabagh Dam,” he said.

Nepra concluded the hearing stating that it had heard all the stakeholders and would issue a final determination after further analysis of the submitted data.

NEPRA reserves ruling on tariff
The National Electric Power Regulatory Authority (Nepra) on Thursday reserved its judgement on a request for increase in electricity rates up to Rs1.27 per unit on account of fuel charges adjustment (FCA) for April 2025.

Nepra held a hearing to consider the tariff hike plea submitted by the Central Power Purchasing Agency Guarantee Limited (CPPA-G). The hearing was chaired by Nepra chairman and attended by the representatives of CPPA-G, officials of the Ministry of Energy, business community members, journalists and members of the public. According to Nepra, CPPA-G had filed a request for a tariff hike of Rs1.268 per unit under the FCA for April. If approved, the increase will be applicable for one month only.

The proposed adjustment will apply to all consumers of power distribution companies (DISCOs), excluding lifeline consumers, pre-paid meter users and electric vehicle charging stations. Nepra also stated that the adjustment would not be applicable to K-Electric consumers.

The regulator emphasised that it carefully heard the views of all relevant stakeholders. It will now conduct further scrutiny of the data before issuing a detailed decision.

According to the CPPA-G petition, the actual fuel cost borne during April was Rs9.9197 per kilowatt-hour (kWh) while the reference cost – used for billing consumers – was Rs7.6803 per kWh. The difference of Rs1.2685 per unit is now sought to be recovered from consumers.

In its request, CPPA-G stated that a total of 10,513 gigawatt hours (GWh) of electricity was generated in April, of which 10,196 GWh – nearly 97% – was supplied to DISCOs while the rest was lost in transmission.

Data revealed that power generation in the month under review remained heavily reliant on costly imported fuels. Over 20% of electricity was generated by using imported liquefied natural gas (LNG) at an extremely high cost of Rs24.26 per unit. The electricity produced from imported coal also proved expensive, costing Rs16.60 per unit.

While the share of hydroelectric power was relatively significant at 21.94% and nuclear power contributed 17.91% at a low cost of Rs2.10 per unit, these cheaper sources were unable to offset the impact of expensive fuel-based generation.

Local coal accounted for 14.51% of the generation at Rs11.21 per unit and gas-based power added another 8% at Rs11.82 per unit. Power generation from furnace oil, though minimal at just 0.79%, was the costliest, being recorded at Rs28.77 per unit.

The petition highlighted a small quantity of power  — around 0.31% – imported from Iran, which came at a high cost of Rs25.35 per unit. No generation was recorded from high-speed diesel, which is typically reserved for emergency use due to its high cost.

The proposed tariff increase, if approved, will be reflected in the electricity bills of millions of consumers, excluding lifeline users.

No change, or nominal cut in POL prices likely from June 1
The price of petrol is likely to go down by Rs0.60 per litre and high speed diesel (HSD) by Rs0.28 per litre, industrial and official sources told The News on Thursday.

However, chances are bright for keeping the POL [petrol, oil, lubricant] prices unchanged from June 1, 2025. This will be decided with input of the finance ministry.

Nevertheless, the kerosene oil price may increase by Rs0.30 per litre to Rs164.96 from the existing Rs164.64 per litre. The price of light diesel oil (LDO) is also likely to increase by Rs1.30 per litre. In the international market, Brent crude oil price ranged between $64.02-64.60 per barrel. West Texas Intermediate fell more than 1.5 per cent to trade below $61 a barrel after Interfax cited Kazakhstan as saying that OPEC+ is set to hike output at a meeting on Saturday, with the size of the increase still to be decided. Broader markets eased off of earlier highs on data showing the US economy shrank at the start of the year, further pressuring the commodity. Crude had earlier rallied as much as 2pc after a trade court blocked a vast range of President Donald Trump’s trade levies, including elevated rates on China — the world’s top importer of crude.

Fuel smuggling causing over Rs500bn loss to state kitty, NA panel told
Opposition Leader in the National Assembly, PTI leader Omar Ayub Khan, Thursday raised the issue of smuggling of petroleum products from Iran in the meeting of the National Assembly’s Standing Committee on Finance.

The PTI leader said the smuggling of petroleum products was causing a revenue loss of Rs500 to Rs550 billion to the national exchequer. He said the smuggling could not occur without the nexus of intelligence agencies and customs intelligence and proposed that drone technology be utilized to ensure surveillance on known routes at the porous borders.

Representatives of the refineries briefed the committee that their input was taxed, but on output, there was no GST, causing problems over the last several years. Without resolving this issue, they would not be able to invest $6 billion.

Chairman Federal Board of Revenue (FBR) Rashid Mahmoud Langrial said the refineries business came out of the ambit of Value Added Tax (VAT) when there was no tax on their output. He said proposals were under consideration to slap GST on their output or provide them with some kind of other permanent solutions.

The beverage industry informed the committee that their volume and tax contribution had reduced with increased taxation. Ms Atika Mir, representing the juice and beverages industry, proposed reduction in the FED rate from 20 to 15 percent. Langrial said if the industry could give a post-dated bank cheque for increased tax collection from their sector, then the FBR might consider a reduction in the tax rates.

The parliamentarians inquired whether the government was going to impose tax on the imported solar panels, the FBR chairman replied that the government was reviewing to withdraw tax exemptions on different products in the upcoming budget.

Meanwhile, the government Thursday announced that there was no change in the schedule of the upcoming budget, and it will be announced on June 10.

After the National Assembly’s Standing Committee on Finance proceedings were over, journalists asked Federal Finance Secretary Imdad Ullah Bosal about further extension in the budget presentation from June 10 to 12, he firmly stated that the budget would be announced on June 10.

When asked about the holding of the National Economic Council (NEC) for approving the macroeconomic framework and development outlay as well as unveiling the Economic Survey for 2024-25 on the same date of June 9, 2025, he replied that the NEC might be rescheduled, but he could not say it with authority. However, the budget will be announced on June 10.

To another query about the postponement of ADB’s Board from May 28 to June 3, he said it would be held on June 3 to consider the approval of guarantees and loans.

Later, Finance Minister’s Advisor Khurram Shahzad in his X post stated that as communicated earlier, the upcoming federal budget is on schedule to be announced on June 10, 2025. Similarly, the upcoming Pakistan Economic Survey FY25 is scheduled to be announced on June 9.

Meanwhile, the Senate Standing Committee on Finance and Revenue, chaired by Senator Saleem Mandviwalla, Thursday approved the Income Tax (Second Amendment) Bill 2025.

The committee focused on the withdrawal of tax exemptions for salaried individuals, particularly teachers whose salaries faced significant deductions. Senator Mohsin Aziz suggested expediting the refund or adjustment process. Mandviwalla directed the FBR to submit a detailed report identifying the affected teachers and the status of their refunds, emphasizing that failure to return deducted amounts undermined the law.

The FBR chairman assured compliance and supported the committee’s recommendations. The committee also reviewed budgetary allocations and utilization under the Public Sector Development Programme (PSDP) for FY2024 25.

While the Planning Commission raised concerns over the lapsed project budgets, the finance ministry officials clarified that no funds had lapsed and over 50 percent of authorized funds had already been disbursed.

During discussions on the proposed barter trade mechanism between Pakistan and Iran, Senator Mandviwalla inquired about the absence of a formal net-off settlement mechanism and urged the departments concerned to develop a clear procedure. The committee emphasized relaxing existing restrictions and expanding the list of tradable items. Mandviwalla asked the stakeholders to submit proposals for new items and directed the authorities to resolve operational issues such as limited customs hours and storage space at NLC terminals in Quetta. He also recommended forming a local committee in Quetta to address traders concerns on the ground.

Govt mulls sales tax exemption on refinery equipment imports
The government is considering granting a sales tax exemption on the import of equipment and machinery required for the upgradation of refineries under the Brownfield Refinery Policy.

Minister for Petroleum Ali Pervaiz Malik, who held meetings with various stakeholders in the oil sector, has indicated that such an exemption may be on the cards, noting that imposing a sales tax on petroleum products would be difficult due to its inflationary impact. “As the IMF demands a uniform sales tax regime, it would be challenging for the government to comply without raising domestic petroleum prices,” a meeting participant quoted the minister as saying.

The minister reportedly assured stakeholders that while the exemption on petroleum products may be withdrawn in the upcoming budget, it is highly unlikely that any new sales tax will be levied on petroleum products sold in the domestic market.

According to a press release from Pakistan State Oil (PSO), Malik visited the PSO House on Thursday as part of a strategic outreach to key players in the petroleum sector. During the visit, he met with the chairperson of PSO’s Board of Management Asif Baigmohamed and discussed areas of mutual business interest.

The minister also held a series of high-level meetings focused on strengthening coordination and ensuring operational excellence across the sector. He reviewed PSO’s performance, supply chain resilience and automation initiatives and lauded the company’s role in maintaining a steady fuel supply nationwide. He also appreciated PSO’s modernisation efforts and its shift towards renewable energy and emerging segments of the energy market.

Listening attentively to the challenges faced by PSO, the minister assured the company of the government’s full support. He reiterated the government’s commitment to ensuring reliable, sustainable and affordable energy for consumers. In a separate engagement, Malik met with representatives of the Oil Companies Advisory Committee (OCAC), including Secretary General Syed Nazir Abbas Zaidi, Wafi Energy Pakistan CEO Zubair Shaikh, Managing Director of Pakistan Refinery Limited Zahid Mir, and PSO Chief Supply Chain Officer Abdus Sami. Discussions revolved around industry-wide challenges, regulatory changes and the need for greater policy alignment to ensure a stable and efficient energy supply chain.

The minister also held a session with a delegation from the Petroleum Dealers Association, led by Chairperson Abdul Sami Khan. Operational challenges and concerns over dealer profit margins were raised during the meeting.

Malik assured dealers that their legitimate concerns would be addressed through dialogue. He said: “The government is fully committed to steering [the] energy sector towards greater resilience, sustainability and innovation. Our priorities include streamlining operations, addressing systemic challenges and creating a balanced ecosystem that serves consumers and supports economic stability.” He added: “Enhancing fuel quality, reducing emissions, and advancing the transition to clean energy are central to this vision. In the best interests of the country, all stakeholders must work together with a shared commitment to progress. Together, we can build a modern energy sector that meets the evolving needs of our nation.”

Govt weighs wheat product import, export
Federal Minister for National Food Security and Research, Rana Tanveer Hussain, met a delegation of the Pakistan Flour Mills Association (PFMA) to discuss critical issues in the wheat sector.

According to a statement issued Thursday by the ministry, the PFMA formally requested permission for the import-cum-export of wheat products to boost industrial activity, maintain supply chains, and enhance foreign exchange reserves.

The minister assured the delegation that the government is seriously evaluating the proposal. He emphasised that facilitating the trade of wheat-based products could strengthen the local flour milling industry, unlock international market opportunities, and contribute to foreign exchange earnings. "We are committed to supporting responsible trade policies that aid economic growth without compromising domestic food security," he said.

Addressing concerns about the release of strategic wheat reserves, the minister clarified that stocks held by PASSCO are strictly reserved for emergencies and will not be released to the open market.

CAREC states invited to join Pakistan's SEZs
Minister for Planning, Development and Special Initiatives Ahsan Iqbal on Thursday invited member states of the Central Asia Regional Economic Cooperation (Carec) to integrate their value chains with Pakistan's Special Economic Zones (SEZs) and explore opportunities for cross-border industrial clusters by leveraging Pakistan's preferential trade agreements with China, Asean and the Middle East.

He extended the invitation while speaking at the inaugural ceremony of the fifth annual Carec Institute Research Conference, held in collaboration with the University of Sargodha.

Themed "Carec Connectivity: Promoting Trade and Trade Facilitation," the conference brought together a diverse group of national and international stakeholders.

"Today, intra-regional trade among Carec countries (excluding China) accounts for only 7% of total trade. In contrast, Asean bloc member countries have over 22% of total trade among themselves," he said.

The Carec region, with a population of nearly two billion and vast reserves of energy, minerals and talent, was not short on potential, Iqbal said and stressed the need for a unified development strategy backed by collective action.

Sharing the new development vision called Uraan Pakistan, the minister said it was based on five strategic pillars including exports, equity and empowerment, e-Pakistan, environment, energy and infrastructure. This strategy is not isolated from regional ambitions; rather it is aligned fully with the Carec Vision 2030.

He pointed out that Pakistan was expanding high-value exports like IT, halal food and engineering goods. Pakistan's IT exports, for instance, have crossed $3.5 billion and are growing at an annual pace of 20%, empowering youth through digital skills.

Tiles industry warns of $400m forex outflow
The tiles industry has cautioned the government that the proposed new tariffs could force a shift from domestic manufacturing to an import-based model, potentially leading to annual foreign exchange outflow of $400 million.

Industry stakeholders have urged the government to maintain the existing tax structure in the upcoming budget for 2025-26.

The Ministry of Industries and Production held a second meeting of the committee formed for the development of tiles industry, under the chairmanship of Special Assistant to the Prime Minister Haroon Akhtar Khan, according to a press release.

Khan reviewed the progress reports submitted by the tiles industry and the Engineering Development Board and emphasised that the industry must not be allowed to shut down, highlighting its critical importance for the national economy.

It was noted that before 2018, a 55% regulatory duty was imposed on tiles, which led to annual imports worth $215 million. The industry currently faces acute cost disadvantages compared to the major tile-producing and exporting countries in the region. The production cost has increased 72% primarily due to the rising prices of gas and power.

SBP forex reserves rise by $70m to $11.52bn
The State Bank of Pakistan’s foreign exchange reserves increased by $70 million to $11.516 billion in the week ending May 23, the central bank said on Thursday.

However, the total liquid foreign reserves held by the country dropped by $12 million to $16.637 billion. Similarly, the reserves of commercial banks fell by $81 million to $5.12 billion.

The SBP managed to increase its reserves despite external debt repayments, thanks to a current account surplus. Additionally, inflows from the International Monetary Fund (IMF) and rollovers from friendly nations played a crucial role in bolstering forex reserves. The SBP received the second tranche of $1.023 billion from the IMF under a $7 billion loan programme on May 13.

The SBP purchased $5.9 billion from the interbank market between June 2024 and February 2025 to boost its reserves and meet external debt repayments. In February, the SBP bought $223 million worth of foreign currency from the market, up from $154 million in the previous month.

In April, the current account surplus dropped to $12 million, a staggering 99 per cent decrease from the month before. The surplus fell by 96 per cent year on year. The surplus during the first 10 months of fiscal year 2025 was $1.88 billion, which is a substantial improvement over the $1.33 billion deficit for the same period the previous year.

 

Solar panels: Govt mulling withdrawing ST exemption
Chairman Federal Board of Revenue (FBR) Rashid Mahmood said Thursday that the government is examining a proposal to withdraw sales tax exemption on solar panels in budget (2025-26).

FBR Chairman was responding to a query of a member of the Senate Standing Committee on Finance during meeting held at the Parliament House.

He stated that the FBR is working on proposals to withdraw all kinds of tax exemption including exemption available on the import of solar panels.

Meanwhile, during another meeting of the National Assembly Standing Committee on Finance, the representatives of Refineries briefed the committee that their input was taxed, but on output, there was no GST, causing problems over the last several years. Without resolving this issue, they would not be able to invest $6 billion.

The Chairman FBR, Rashid Mahmood Langrial, said that their business came out of the ambit of the Value Added Tax (VAT) when there was no tax on their output. He said that there were proposals under consideration to impose sales tax on their output or provide them some kind of other permanent solutions.

Chairman FBR has also assured the committee that he will inquire into the matter of recovering over Rs 80 million amounts from KababJee restaurant Karachi.

Member of committee Mirza Ikhtiar Baig raised the issue before the finance committee chaired by Nafeesa Shah.

He informed that FBR has recovered more than Rs 80 million from accounts of this restaurant without giving any chance of hearing in different forums. He has no money to pay salaried and owner of the restaurant has threatened to commit suicide. The business community is pressing me for this harassment by the FBR, Baig added.

The FBR Chairman replied that I did not have knowledge of this particular case. I will update the committee after inquiring about the matter from the relevant field office of FBR.

The committee considered “The Income Tax (Second Amendment) Bill, 2025”. The Committee expressed concern over the second proviso of the newly inserted clause (3A). The Secretary Revenue assured the Committee that the concerns of the Hon. Members would be addressed and that the words “and shall cease to have effect after tax year 2025” would be deleted. Upon the assurance given by the Secretary Revenue, the Committee recommended that the Bill, as amended, may be passed by the Assembly.

The Committee considered Starred Question No. 38, moved by Aliya Kamran, MNA, regarding the imposition of Section 99D of the Income Tax Ordinance, 2001, and Starred Question No. 40, moved by Sharmila Sahiba Faruqui Hashaam, MNA, regarding the recent policy shift prioritizing digital currencies, without adequately addressing their regulatory deficiencies. After a detailed discussion the Committee decided to defer both agenda items for discussion in the next meeting of the Committee. The report on the “non-implementation of minimum wages, as announced by the Federal Government in its departments”, a matter raised by Syed Rafiullah, MNA and referred by the Honourable Speaker, was also deferred due to the absence of the mover.

IK ready to hold talks with establishment: PTI
The incarcerated Pakistan Tehreek-e-Insaf (PTI) founding chairman, Imran Khan, made it clear that there would be no give and take in any negotiations, but his doors are open for talks with the establishment for the sake of the country.

Senator Ali Zafar, quoting Khan after a meeting at Adiala Jail during the hearing of the General Headquarters (GHQ) attack and other May 9 violence -related cases, said the former prime minister emphasised that his doors remain open for talks aimed at the country’s benefit. However, Khan stressed that if he sought any personal relief, he would have done so long ago. In response to Aleema Khan’s recent comments about the possibility of give and take, Khan clarified that if it is for the benefit of the country, then he is indeed ready for “give and take.” However, his primary demand is justice — he called for his legal cases to be heard promptly and fairly.

PTI chairman calls for a ‘political ceasefire’ in Pakistan

Zafar while quoting Khan further stated that the former premier said that a protest movement has already been announced and a detailed plan of action will be shared within five to six days.

Khan urged the party leadership to prepare for full participation in the movement, Zafar said.

Furthermore, Khan issued a stern warning against dual loyalties, saying that he will not tolerate anyone playing on both sides of the wicket.