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ISLAMABAD: The prices of several essential food and household items have recorded significant changes over the past year, with onions and tomatoes witnessing some of the sharpest increases, according to the latest data released by the Bureau of Statistics. The data showed that onion prices jumped by 132.52% on a year-on-year basis, making the vegetable one of the biggest contributors to the increase in food costs. Tomato prices also surged by 93.21% during the same period, putting additional pressure on household budgets. Among other essential commodities, the price of flour rose by 62.25% over the year, while LPG became 51.69% more expensive. The prices of diesel and petrol increased by 33.08% and 27.65%, respectively, adding to transportation and household expenditure pressures. The data further showed that banana prices increased by 17.66% during the year. Mutton became 15.98% more expensive, while beef prices recorded an increase of 13.54%. However, several food items became cheaper compared with their prices a year earlier. Potato prices declined by around 30%, providing some relief to consumers. Sugar prices fell by 19.10%, while chicken became 17.68% cheaper. Egg prices also registered a year-on-year decline of 17.41%, while gram prices dropped by more than 13%. The statistics further revealed that prices of lentils and masoor decreased by 12.29%, while jaggery became around 6% cheaper over the year.

The Pakistan Bureau of Statistics (PBS) has revised the country’s monthly and annual import figures after uncovering major discrepancies in trade data, with the adjustments reaching billions of dollars over certain periods. The data revisions, which could amount to as much as $30 billion for some periods, are expected to have a notable impact on Pakistan’s Gross Domestic Product (GDP) calculations and other key economic indicators. The statistical agency has incorporated the updated import figures across several major sectors as part of the data reconciliation process. According to senior government officials, the PBS has completed a detailed report outlining the discrepancies and the methodology used to revise the import statistics. The report has been submitted to the Ministry of Finance, which is currently examining its potential implications. The ministry is expected to make the findings public by the end of August 2026. Differences emerge between PBS and SBP data The issue came to light after officials identified significant differences between import figures compiled by the PBS and corresponding data maintained by the State Bank of Pakistan (SBP). The discrepancies were initially detected while comparing Pakistan’s trade figures with China. Further scrutiny subsequently revealed differences in specific tariff lines and categories of imports that had not been fully reflected in the PBS data. Following the discovery, the Pakistan Single Window and other relevant government institutions became involved in the reconciliation process. The objective was to identify the source of the differences, verify transaction-level information and ensure that import statistics accurately reflected the country’s external trade. The matter later attracted the attention of the International Monetary Fund (IMF), which has been closely monitoring Pakistan’s economic data and statistical reporting under its reform programme. IMF seeks greater transparency The IMF had previously highlighted weaknesses in Pakistan’s procedures for collecting, compiling and consolidating import data. It called for improvements in the statistical framework and greater transparency about the scale and economic impact of the discrepancies. Under the agreed reform requirements, the PBS was tasked with publishing revised monthly and annual import statistics by the end of August 2026. The statistical agency is also expected to provide an explanation of the changes and their impact on previously reported figures. The revisions are particularly significant because imports are an important component of national accounts and external-sector statistics. Changes in import values can influence the calculation of GDP, trade balances, current account figures and other macroeconomic indicators. GDP impact under review The Ministry of Finance is examining the PBS report largely because of the potential impact of the revised import figures on national economic data. Officials are assessing how the changes could affect previously reported GDP estimates and other indicators based on import statistics. The scale of the revisions means that the exercise could result in adjustments to historical economic data, depending on how the revised figures are incorporated into the national accounts. Officials, however, are expected to provide further details once the Ministry of Finance completes its review and the PBS publishes the revised statistics. IMF review mission approaching The development comes ahead of the IMF’s next review of Pakistan’s economic reform programme. The Fund’s review mission under the country’s $7 billion Extended Fund Facility (EFF) is expected to visit Pakistan by early September 2026. The publication of revised import data before the mission’s arrival is likely to be closely watched, as strengthening the reliability and transparency of economic statistics remains an important element of Pakistan’s commitments under the IMF programme.

The federal government has set an ambitious target of Rs1.676 trillion in petroleum levy (PL) collections for fiscal year 2026-27 (FY27), with the revenue plan based on an average levy of Rs80 per litre on petrol and High Speed Diesel (HSD). Minister for Energy (Petroleum Division) Ali Pervaiz Malik disclosed the details in a written response submitted to the National Assembly, explaining that the government is gradually restoring the petroleum levy in accordance with the revenue target approved under the federal budget. The levy has been adjusted several times since the beginning of the fiscal year as the government attempted to balance revenue requirements with the impact of fluctuations in international oil prices. According to the minister, the government had reduced the levy during a period of volatility in global oil markets to provide some relief to consumers. However, as part of its fiscal strategy and commitments to international financial institutions, the levy is now being increased in phases. Petroleum Levy Revised Multiple Times The petroleum levy structure underwent a series of changes during July and August. On July 1, the levy stood at Rs66.64 per litre on petrol and Rs79.54 per litre on HSD. A day later, on July 2, the rates were revised downward to Rs64.14 on petrol and Rs77.04 on HSD. The rates were subsequently changed again on July 4, when the levy on petrol was raised to Rs70.36 per litre, while the HSD levy was set at Rs70.82 per litre. The levy on petrol eventually reached the government’s budgeted benchmark of Rs80 per litre on July 11. The adjustment on HSD took place more gradually. The levy was increased in stages during August and reached Rs78.28 per litre on August 14. By August 20, the government had raised the levy to Rs80 per litre on both petrol and HSD, bringing both products in line with the budget assumption. As a result, the petroleum levy on petrol increased by Rs13.36 per litre between July 1 and August 20. Revenue Target Linked to Fiscal Commitments Responding to questions in the National Assembly, Malik said the petroleum levy collection target forms part of the government’s approved federal budget and is connected with broader fiscal commitments made with international financial institutions. The minister clarified that the Petroleum Division had not conducted a separate assessment of the impact of the levy on individual categories of consumers. The government is relying on petroleum levy receipts as an important source of non-tax revenue as it works to meet its overall fiscal targets for the financial year. The levy is particularly significant for the government’s revenue strategy because changes in the rate directly affect the amount collected from petroleum products sold in the domestic market. Relief Depends on Fiscal Space When asked whether the government could reduce the petroleum levy to provide relief to consumers, the minister said any decision would depend on several factors, including the government’s available fiscal space, revenue requirements, commitments to international financial institutions and movements in global oil prices. Malik also maintained that the government attempts to pass on the benefit of lower international petroleum prices to domestic consumers whenever fiscal conditions allow. This means that any substantial reduction in the petroleum levy or domestic fuel prices in the coming months is likely to depend on a combination of global oil market trends and the government’s budgetary position. The government’s decision to restore the levy to Rs80 per litre comes as authorities seek to strengthen revenue collection while simultaneously managing fuel prices and their impact on inflation and household budgets. For consumers, the levy remains a key component of the final retail price of petroleum products. Any increase or decrease in the levy can therefore influence the price paid at fuel stations, although the final price also depends on international oil prices, exchange-rate movements and other applicable taxes and charges. With the FY27 petroleum levy target set at Rs1.676 trillion, the government is expected to closely monitor both international energy prices and domestic revenue performance as it seeks to meet its fiscal commitments without placing additional pressure on consumers.

Pakistan’s oil refineries have agreed to move ahead with long-delayed agreements for upgrading their ageing plants, even as they continue to raise objections over a new financial penalty linked to the petroleum policy. Under the revised arrangement, refineries will be required to surrender 2.5 percent of the deemed duty retained on diesel for the period of delay. Industry representatives have termed the condition unfair, arguing that the delays were largely beyond their control and should not result in a financial burden on the refineries. Despite the disagreement over the penalty, refinery companies have indicated that they do not intend to hold up the signing of the agreements and are prepared to proceed with the modernization programme. The government’s Brownfield Refinery Policy, originally approved in August 2023, was introduced to encourage investment in the modernization and expansion of Pakistan’s existing refining capacity. The policy has subsequently been amended twice in an effort to address implementation issues and facilitate investment in the sector. Petroleum Minister Ali Pervaiz Malik has indicated that the long-pending agreements will be finalized shortly, while officials in the Petroleum Division are expecting the documents to be signed by the end of August. Agreements to Be Signed With ISGS A key change under the revised mechanism is that the upgrade agreements will now be executed with Interstate Gas Systems (ISGS), which operates under the Petroleum Division. Previously, the agreements were expected to be concluded through the Oil and Gas Regulatory Authority (Ogra). The change in the implementing entity is part of the government’s efforts to move the refinery-upgrade programme forward after delays in finalizing the contractual framework. Industry representatives, however, have maintained that refinery companies had already taken substantial steps to comply with the earlier arrangements and should not be penalized for delays that occurred afterward. Refineries Object to 2.5% Penalty Adil Khattak, Chief Executive Officer of Attock Refinery Limited and Chairperson of the Energy Committee of the Overseas Investors Chamber of Commerce and Industry, said Attock Refinery and National Refinery had completed several important formalities ahead of the previous deadline of October 22, 2024. According to Khattak, the companies had initialed agreements with Ogra, secured approval from their respective boards and arranged Rs1 billion bank guarantees each as part of the requirements. He said the companies were nevertheless being asked under the revised arrangement to surrender 2.5 percent of the deemed duty retained on diesel for the period between the previous deadline and the signing of the new agreements. The financial implications could be substantial. Khattak said Attock Refinery alone could face a penalty of around Rs7.5 million for every day of delay, increasing the industry’s concerns over the cost of the prolonged implementation process. Refineries argue that imposing the financial charge is inappropriate because they had already completed the required formalities within the earlier timeframe and were not responsible for subsequent delays in finalizing the agreements. Draft Agreements Circulated The Petroleum Division has now circulated draft upgrade agreements among the refineries, marking another step towards implementation of the long-delayed modernization programme. Officials are expected to hold further consultations with the Ministry of Finance, Controller of Accounts and ISGS before the agreements are finalized. Although refinery companies have reservations about the penalty clause, industry representatives have indicated that the disagreement will not prevent them from signing the agreements. The refineries are instead seeking a resolution of the financial issue separately while allowing the broader modernization programme to proceed. Upgrade Seen as Critical for Energy Security The modernization of Pakistan’s refining sector has gained greater importance as the country remains heavily dependent on imported petroleum products to meet domestic demand. Khattak estimated that delays in upgrading local refineries are costing Pakistan approximately $1.5 billion annually through additional fuel imports and the resulting foreign exchange outflows. Industry officials argue that upgrading domestic plants would allow refineries to produce a greater proportion of higher-value petroleum products while reducing dependence on imports. The issue has also acquired greater significance amid repeated disruptions and uncertainty in international energy markets. Greater domestic refining capacity and improved processing technology could provide Pakistan with an additional buffer against external supply shocks and volatile global fuel prices. Attock Refinery Moves Toward Financing Attock Refinery has already made considerable progress on the technical side of its proposed modernization project. The company has largely completed its front-end engineering and design work and has begun discussions with banks to arrange financing for the planned investment. The next stage will depend on the finalization of the government agreement and the completion of financing arrangements. For Pakistan, the successful implementation of the brownfield refinery upgrade programme could help improve domestic fuel production, reduce import dependence and ease pressure on foreign exchange reserves. However, industry stakeholders say timely decisions on the remaining contractual and financial issues will be essential if the government wants to avoid further delays in a programme that was originally launched several years ago.

Pakistan has significant room to expand its presence in the global Islamic economy by introducing innovative Shariah-compliant financial products, strengthening regulatory frameworks and developing specialized professional expertise, Secretary General of the Islamic Chamber of Commerce and Development (ICCD) Yousef Hassan Khalawi has said. Speaking at the Securities and Exchange Commission of Pakistan (SECP) Talk Series on Islamic finance, Khalawi highlighted Pakistan’s structural advantages and said the country was well placed to capture a larger share of the rapidly evolving global Islamic economy. He noted that Pakistan has a large Muslim population, a substantial overseas Pakistani community and an expanding Islamic finance sector. The country also has a growing base of professionals working in banking, capital markets and other financial services, providing a foundation for further development of the industry. However, Khalawi stressed that Pakistan would need to move beyond conventional Islamic finance offerings if it wanted to compete more effectively in international markets. He encouraged financial institutions and regulators to focus on developing innovative products capable of addressing emerging domestic and global demand, particularly through financial technology. Fintech seen as key driver According to Khalawi, fintech could play an important role in making Islamic financial services more accessible, efficient and affordable. Digital platforms can potentially reduce transaction costs while allowing Shariah-compliant products to reach customers who remain underserved by traditional financial institutions. He also emphasized that Islamic finance should not be viewed solely as a mechanism for structuring financial transactions. Instead, he said, the sector should play a wider role in supporting economic growth, social welfare and productive investment. One area with considerable potential is Waqf-based investment. Khalawi suggested that professionally managed and transparent listed Waqf structures could enable individuals to make relatively small contributions that could collectively generate financing for projects in key social sectors. Such models, he said, could help channel funds towards education, healthcare and infrastructure while creating a more organized framework for mobilizing charitable and community-based capital. Agriculture offers untapped potential Agriculture was also identified as an important sector where Islamic finance could make a greater contribution. Khalawi called for the development of specialized Shariah-compliant financing instruments tailored to the needs of farmers, agribusinesses and other participants across the agricultural value chain. Greater technical expertise would also be required to design products that address the specific risks and cash-flow patterns associated with agriculture. Expanding access to appropriate financing could help unlock investment and support productivity in the sector. Interest-free lending and financial inclusion The discussion also examined Qard Hassan, an interest-free lending mechanism that can provide financing to individuals without imposing conventional interest charges. Khalawi said technology could help make Qard Hassan arrangements easier to administer and more accessible to potential borrowers. Digital platforms could reduce administrative expenses, improve transparency and facilitate the distribution of small-scale interest-free loans. He further highlighted the importance of establishing common Shariah standards to promote consistency across the Islamic finance industry. Differences in interpretation and product structures can create challenges for institutions seeking to operate across markets, making greater standardization important for the sector’s international growth. Professional training was another key area highlighted during the discussion. Khalawi stressed that the continued expansion of Islamic finance would require professionals with expertise in both financial markets and Shariah principles. For Pakistan, strengthening regulatory capacity, expanding specialized training and encouraging innovation could help create an ecosystem capable of supporting new Islamic financial products. The SECP discussion underscored the broader opportunity for Pakistan to position Islamic finance as a tool not only for financial-sector development but also for investment, entrepreneurship, social welfare and sustainable economic growth.

ISLAMABAD: Electricity consumers across Pakistan could face an additional burden of around Rs2.50 per unit as the government moves to recover more than Rs34 billion through the July 2026 monthly Fuel Charges Adjustment (FCA), according to sources. The proposed increase is expected to affect consumers of distribution companies (Discos) as well as K-Electric, with the final adjustment to be determined by the National Electric Power Regulatory Authority (Nepra) after reviewing the relevant power purchase and generation costs. Sources said the expected positive FCA for July has largely been driven by higher electricity consumption during the peak summer season and greater reliance on expensive generation sources. Among the key factors behind the anticipated increase are the use of liquefied natural gas (LNG) procured from the spot market and furnace oil to meet additional electricity requirements, particularly during periods of high demand. June FCA already approved The expected July adjustment comes after Nepra approved a positive FCA of Re0.7503 per unit for electricity consumed in June 2026. The adjustment was lower than the Rs1.20 per unit sought by the Central Power Purchasing Agency-Guaranteed (CPPA-G). Under the FCA mechanism, variations in fuel costs and other electricity generation and purchase-related expenses are passed on to consumers through periodic adjustments. For July, CPPA-G will submit its relevant claims to Nepra, which will examine the costs and determine the admissible adjustment before issuing separate decisions for the respective distribution companies. Multiple costs to be examined The regulator is expected to assess several components included in the FCA claim before determining the final amount recoverable from consumers. Separate adjustments will subsequently be calculated for each Disco after taking into account electricity purchased through CPPA-G, bilateral arrangements with small power producers and captive power producers, as well as electricity supplied under net-metering arrangements. The final impact on consumers could therefore vary depending on the individual power procurement mix and applicable tariff structure of each distribution company. Expensive generation raises concerns The expected tariff increase has emerged at a challenging time for Pakistan’s industrial sector, where electricity prices remain a major concern for manufacturers and exporters. Industrial consumers are already facing pressure from elevated production costs, while exporters are also dealing with uncertainty caused by deteriorating security and economic conditions in the Middle East. The latest FCA discussion has also brought the issue of partial-loading charges under scrutiny. During a recent hearing, Nepra raised questions over approximately Rs4.9 billion in partial-loading costs and asked CPPA-G to explain the reasons behind the additional expenditure and measures being considered to control it. Solar power changes demand pattern CPPA-G told the regulator that the partial-loading charges were not primarily the result of inefficient operation by power plants. Instead, the agency attributed the costs largely to changes in electricity consumption patterns caused by the rapid expansion of rooftop solar generation. According to CPPA-G, daytime demand from the national grid has declined as more consumers generate electricity through rooftop solar systems. Conventional power plants are consequently required to operate below their optimum capacity during solar-generation hours. However, demand rises again in the evening when solar generation falls, forcing grid-connected power plants to increase generation quickly. This change in the daily demand curve has created additional operational costs for the power system. The authority noted that partial-loading charges recorded in June 2026 were around Rs1 billion higher than the corresponding amount in June 2025, highlighting the growing financial impact of the changing electricity demand pattern. Plant shutdowns could increase costs The Independent System and Market Operator (ISMO) also informed the regulator that shutting down power plants during periods of lower demand would not necessarily provide a cheaper solution. According to ISMO, taking plants completely offline to avoid partial-loading charges could result in substantial start-up expenses when the units are required again to meet evening demand. The issue has therefore become increasingly important as the rapid growth of distributed solar generation continues to alter the traditional pattern of electricity consumption. Exporters seek cheaper fuel options Amir Sheikh, a prominent textile exporter, called for the removal of the levy imposed on high-speed diesel and furnace oil-related generation costs, arguing that furnace-oil-based power plants could offer an alternative to expensive RLNG-fired generation under certain circumstances. He maintained that allowing more flexible use of available generation sources could help reduce the overall cost of electricity, particularly during periods when LNG prices remain elevated. Sheikh also proposed a change in the way FCA-related surcharges are calculated. He suggested that the additional charges should be recovered on the basis of projected electricity consumption rather than only through the conventional mechanism, similar to the approach followed under quarterly tariff adjustments (QTA). Falling demand creates another challenge Another concern raised during the discussion was the continuing decline in electricity demand and its possible implications for future tariff adjustments. Rehan Javed highlighted the potential impact of lower electricity consumption on the power sector’s financial structure, particularly as fixed system costs are spread over a smaller volume of electricity sales. The Ministry of Energy’s Power Division, however, said the decline in demand was largely linked to the increasing number of consumers using net-metering facilities. The ministry maintained that although distributed solar generation was changing electricity consumption patterns, its impact on future quarterly tariff adjustments would not necessarily be as severe as feared by industrial consumers. Government seeks to avoid costly LNG purchases The Power Division further explained that electricity demand was being managed in a manner designed to reduce dependence on expensive RLNG spot-market cargoes. Officials said excessive reliance on spot LNG during the summer could significantly increase power generation costs and ultimately translate into higher electricity tariffs for consumers. The government is therefore attempting to balance electricity availability, fuel costs and demand management while dealing with the changing structure of Pakistan’s power market. If Nepra ultimately approves an FCA close to the expected Rs2.50 per unit, consumers could face another substantial increase in their electricity bills. The final adjustment, however, will depend on Nepra’s assessment of CPPA-G’s July claim and the costs deemed