The National Electric Power Regulatory Authority (Nepra) has approved a Rs21.436 billion Distribution Investment Plan (DIP) for Sukkur Electric Power Company Limited (SEPCO), covering its transmission and distribution operations for the five-year Multi-Year Tariff (MYT) period from fiscal year 2025-26 through FY2029-30. Along with the investment plan, the regulator has also set provisional targets for transmission and distribution (T&D) losses, while directing SEPCO to improve project execution, digitalise operational data and strengthen its planning and monitoring mechanisms. SEPCO had originally requested approval for an investment programme worth Rs90.563 billion. However, after Nepra raised several questions regarding the proposed projects, costs, utilisation of existing assets and investment requirements, the power utility submitted revised details. Following the revisions, SEPCO reduced its proposed investment to Rs40.191 billion in information submitted to Nepra on June 19, 2026. The revised proposal included changes in investment priorities and network development requirements based on updated demand projections. The company also revised project costs in light of the latest Purchase Orders (POs). Nepra, however, found substantial weaknesses in SEPCO’s original investment submission. According to the regulator, the initial proposal did not adequately reflect actual field conditions and lacked a comprehensive assessment of the utility’s requirements. It also contained gaps in cost calculations and information concerning the utilisation of existing assets. The regulator stressed that future investment planning should be based on reliable data, realistic demand assessments and proper evaluation of existing infrastructure rather than relying solely on projected requirements. Low utilisation of previous investments raises concerns Nepra also raised concerns over SEPCO’s ability to execute projects and utilise approved investment funds effectively. During the previous control period, SEPCO had been allowed investment of Rs39.509 billion. However, the company utilised only Rs14.231 billion, representing around 36% of the approved amount. The regulator said the low utilisation rate raised questions about SEPCO’s project implementation capacity and the efficiency with which approved investments were being converted into infrastructure and operational improvements. Delays were particularly noted in projects falling under the STG head. Nepra attributed the slow progress to difficulties in acquiring land, procurement-related problems and inadequate coordination between relevant departments. The regulator indicated that these issues point towards weaknesses in project planning, monitoring of milestones and implementation. SEPCO asked to improve network performance Nepra has also expressed concern over SEPCO’s technical and operational performance, particularly its transmission and distribution losses and reliability indicators, including the System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI). The authority directed the company to strengthen preventive maintenance programmes, improve energy accounting and introduce stronger system controls. These measures, Nepra said, are necessary to reduce losses, improve reliability and ensure consumers receive a more stable electricity supply. SEPCO’s approved investment priorities include expansion and strengthening of its 132-kilovolt network, augmentation of the existing system to accommodate future electricity demand and the deployment of modern technologies. The proposed technological improvements include Advanced Metering Infrastructure (AMI), Supervisory Control and Data Acquisition (SCADA) systems and Geographic Information System (GIS)-based mapping. These technologies are expected to support better monitoring of the electricity network, improve operational efficiency and enhance safety and service quality. Independent consultant made mandatory In a significant condition attached to the investment approval, Nepra has required SEPCO to engage an independent third-party consultant to review and validate its future investment plans before they are submitted to the regulator. SEPCO has also been instructed to prepare detailed Terms of Reference (ToRs) for the consultant and obtain Nepra’s approval before beginning the procurement process. The regulator said independent validation would help ensure that future investment proposals are based on actual requirements and that proposed projects are properly justified. Nepra pushes digitalisation of SEPCO operations Nepra has further directed SEPCO to move away from manual data-management practices and establish a comprehensive digital system for its operational information. The authority noted that dependence on manual systems can result in errors, delays and inefficient decision-making. A fully integrated digital platform, according to Nepra, would allow the company to monitor its network in real time, improve demand forecasting and make investment decisions based on reliable data. The regulator has also adopted a dynamic approach to the approved investment programme, allowing adjustments on an annual basis as well as a mid-term review. SEPCO has been directed to submit its mid-term review by December 2027. The review will include updated electricity demand forecasts, progress on approved projects and the company’s financial performance. Provisional T&D loss target set at 16.31% For FY2025-26 and FY2026-27, Nepra has approved a provisional T&D loss target of 16.31% for SEPCO. The target includes a 1% allowance related to law-and-order conditions. The regulator has also ordered SEPCO to commission an independent third-party assessment of its T&D losses through an international consultant or consortium. The study is required to be completed within nine months, with the timeline taking effect from January 7, 2026, in accordance with the tariff rebasing decision. Nepra warned that failure to submit the required independent study within the prescribed period could result in the regulator applying benchmark loss levels. Under the benchmark framework, the applicable levels would include 5.32% high-tension (HT) losses and 1.85% low-tension (LT) losses, resulting in total distribution losses of 7.17%. Transmission losses would be set at 1%, while the overall technical loss ceiling would remain within the range of 8% to 10%.

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.

KARACHI: Positive momentum returned to the Pakistan Stock Exchange (PSX) on Monday as investors stepped up buying activity across major sectors, pushing the benchmark KSE-100 Index above the 181,000-point mark during the opening phase of trading. At around 9:40am, the benchmark index was trading at 181,066.59 points, showing an increase of 961.98 points, or 0.53%, compared with the previous close. The early-session recovery reflected renewed investor interest in large-cap and index-heavy companies. Buying was particularly visible across automobile assemblers, cement, commercial banking, fertiliser, oil and gas exploration, oil marketing companies (OMCs), power generation and refinery sectors. Among the major stocks supporting the upward movement were Mari Petroleum (MARI), Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Pakistan Oilfields Limited (POL), Hub Power Company (HUBCO), Habib Bank Limited (HBL), MCB Bank, Meezan Bank Limited (MEBL) and United Bank Limited (UBL). Most of these index-heavy shares traded in positive territory during the initial hours. The recovery came after a difficult week for the domestic equity market. The KSE-100 Index had closed the previous week at 180,104.61 points, declining by 1,325.41 points, or 0.7% on a week-on-week basis. Market sentiment had been affected by heightened geopolitical uncertainty, particularly concerns over the future of the US-Iran ceasefire and the potential impact of regional tensions on international energy supplies. Investors also remained cautious over developments affecting shipping activity around the Strait of Hormuz and the Red Sea, both of which are critical routes for global energy and trade. Despite the pressure on equities, Pakistan’s domestic fiscal position and external-sector indicators had provided some support to investor confidence. However, geopolitical developments continued to dominate trading decisions, particularly because any prolonged disruption to oil supplies could raise import costs and increase inflationary pressures. Global markets remain cautious The cautious mood was also evident across international markets on Monday. Asian equities moved largely sideways as investors monitored developments in the Middle East and assessed the implications for energy prices and global inflation. Oil prices recorded significant gains during the previous week as uncertainty surrounding efforts to end the Iran conflict increased concerns about potential supply disruptions. Investors remained particularly focused on developments concerning the strategic Strait of Hormuz, where tanker traffic had remained disrupted amid the continuing tensions. Iran on Saturday called on the United States to acknowledge defeat, while US President Donald Trump warned Americans that higher gasoline prices could persist as long as the conflict continued. The situation in the wider region also remained volatile. In southern Lebanon, Israeli strikes on Saturday killed at least 11 people, according to the Lebanese health ministry. The casualties came amid renewed tensions following an earlier US-mediated framework aimed at easing hostilities between Lebanon and Israel. Oil prices remain elevated Crude oil prices remained at elevated levels on Monday after recording strong gains during the previous week. Brent crude was trading around $88.50 per barrel, little changed during the session after climbing approximately 6% last week. Meanwhile, US West Texas Intermediate (WTI) crude slipped around 0.3% to $82.12 per barrel, following a weekly gain of about 5.4%. Higher international oil prices remain a key concern for oil-importing economies such as Pakistan because a sustained increase can widen the import bill, put pressure on the current account and contribute to domestic inflation. For investors at the PSX, developments in global energy markets are particularly important because oil and gas companies have significant representation in the benchmark index, while higher fuel costs can also affect the profitability of other industries. Asian equities mixed In regional markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was broadly flat on Monday. Japan’s Nikkei 225, meanwhile, gained around 0.4%. The mixed performance reflected investor caution as markets continued to assess the potential economic consequences of prolonged geopolitical tensions. Concerns over energy prices, inflation and interest-rate expectations remained central to global market sentiment. At the PSX, however, the strong opening suggested that domestic investors were willing to look beyond short-term geopolitical concerns and accumulate fundamentally strong stocks. Whether the KSE-100 can sustain its early gains will depend on developments in global oil markets, regional tensions and trading activity in heavyweight sectors as the session progresses.