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Pakistan LNG Spot Market Purchase Drives Energy Costs Higher as Strait of Hormuz Tensions Disrupt Supplies
Pakistan

Pakistan LNG Spot Market Purchase Drives Energy Costs Higher as Strait of Hormuz Tensions Disrupt Supplies

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Pakistan LNG Spot Market Becomes the Only Immediate Option Pakistan LNG Spot Market purchases have once again exposed the country’s vulnerability to global geopolitical shocks after Islamabad was forced to buy an expensive liquefied natural gas (LNG) cargo following renewed security concerns in the Strait of Hormuz. The emergency procurement highlights how international conflicts can rapidly increase Pakistan’s energy costs while placing additional pressure on electricity generation and foreign exchange reserves. With regular LNG supplies from Qatar still disrupted, Pakistan has little choice but to depend on the volatile international spot market to keep its power plants operating. State-owned Pakistan LNG Limited (PLL) issued an emergency tender earlier this week to secure one LNG cargo for delivery at Port Qasim, Karachi. According to the tender results, BP Singapore Pte Limited emerged as the only bidder, offering to supply approximately 140,000 million cubic feet of LNG at $16.7372 per MMBtu on a Delivered Ex-Ship (DES) basis. The cargo is scheduled to arrive between June 30 and July 4, ensuring uninterrupted fuel supplies for five gas-fired power plants that are expected to face shortages in the coming weeks. The fact that only one company participated in the tender reflects the uncertainty surrounding regional energy supplies and shipping risks in the Gulf. Why Pakistan Had to Buy Expensive LNG Officials from Pakistan’s Energy Ministry say the latest purchase was driven by renewed tensions involving the United States and Iran, which revived concerns over the security of the Strait of Hormuz, one of the world’s busiest energy shipping routes. Although diplomatic efforts earlier this month helped reduce tensions, energy markets remain cautious. Even the possibility of disruption in the Strait immediately affects LNG availability and pricing, forcing import-dependent countries such as Pakistan to pay higher premiums. For Pakistan, delaying procurement was not an option. Without fresh LNG supplies, several electricity generation plants risked reducing output at a time when electricity demand remains high. QatarEnergy Force Majeure Continues to Hurt Pakistan The biggest challenge facing Pakistan is the continued suspension of LNG supplies from Qatar. Energy Ministry officials confirmed that QatarEnergy’s force majeure declaration, issued in March after Iranian attacks damaged two major facilities, remains effective until at least mid-July. As a result, Pakistan cannot currently receive contracted LNG cargoes from one of its most affordable long-term suppliers. This disruption has forced Pakistan LNG Limited to rely on the significantly more expensive international spot market until normal contractual deliveries resume. Pakistan LNG Spot Market Prices Are Much Higher The financial impact of buying LNG through the spot market is substantial. Normally, Pakistan imports LNG under long-term agreements with Qatar at considerably lower prices. However, emergency purchases on the spot market come with significant premiums. Regular contracted LNG generally costs between $10 and $12 per MMBtu, while the latest spot cargo was secured for $16.7372 per MMBtu. In practical terms, Pakistan is paying roughly 40 to 60 percent more for emergency LNG than it typically pays under long-term contracts. Every additional dollar spent on imported LNG increases pressure on Pakistan’s import bill, foreign exchange reserves and electricity generation costs. Power Plants Depend on Immediate LNG Supplies The latest shipment is intended to keep five power plants operational during the coming weeks. Gas-fired power stations remain an important part of Pakistan’s electricity generation mix. Any interruption in LNG availability could reduce electricity production, increase dependence on more expensive fuels, or even contribute to power shortages during periods of peak demand. For policymakers, securing the cargo was therefore viewed as essential despite its higher price. Pakistan’s LNG Supplier Network Faces New Pressure Pakistan normally sources LNG from a diverse group of international suppliers, including BP Singapore, TotalEnergies Gas & Power, Vitol Bahrain, OQ Trading, SOCAR Trading and PetroChina International Singapore. However, ongoing regional instability has complicated procurement decisions. In recent months, Pakistan has repeatedly issued and cancelled LNG spot tenders depending on shipping conditions and access through the Strait of Hormuz. This unpredictable procurement strategy demonstrates how external geopolitical events continue to influence Pakistan’s energy planning. What This Means for Pakistan’s Economy The latest Pakistan LNG Spot Market purchase serves as another reminder of the country’s heavy dependence on imported energy. Higher LNG prices ultimately increase electricity generation costs, widen the import bill and place additional strain on government finances. If geopolitical uncertainty continues or Qatar’s supply disruptions last longer than expected, Pakistan could face further expensive spot purchases during the coming months. The episode also reinforces the need for Pakistan to diversify its energy mix, strengthen domestic production and reduce dependence on imported fuels that remain vulnerable to international conflicts. As global energy markets remain volatile, Pakistan’s ability to secure affordable LNG will continue to play a critical role in maintaining energy security, controlling inflation and supporting economic stability.

Lahore Tutoring Centre Roof Collapse Kills 14 Children as Negligence Probe Begins
Pakistan

Lahore Tutoring Centre Roof Collapse Kills 14 Children as Negligence Probe Begins

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Lahore Tutoring Centre Roof Collapse Claims Young Lives The Lahore Tutoring Centre Roof Collapse has shocked Pakistan after at least 14 children lost their lives when the roof of a private after-school coaching centre suddenly collapsed in Lahore on Tuesday. The tragedy has triggered nationwide anger, renewed concerns over illegal educational facilities, and demands for strict accountability from authorities. Rescue officials recovered the bodies of children and an adult teacher from beneath the debris after hours of rescue efforts. Most of the victims were under the age of nine, turning what should have been an ordinary day of learning into one of the country’s deadliest educational disasters in recent years. The heartbreaking incident has once again exposed serious questions about building safety regulations, enforcement failures, and the unchecked operation of unregistered tuition centres across Pakistan. What Happened in the Lahore Tutoring Centre Roof Collapse? According to Punjab emergency services, the roof of the private tutoring centre suddenly gave way while classes were in progress. Rescue teams rushed to the scene and searched through the rubble for survivors. Among those killed were children aged between five and sixteen years, along with a 30-year-old female teacher. Several injured students were shifted to nearby hospitals, where they continue to receive medical treatment. Witnesses reported that workers had been repairing floor tiles on the roof at the time of the collapse. Family members of victims also claimed the roof had been in poor condition for a long time, raising questions about why children were allowed to remain inside during maintenance work. The incident occurred in a densely populated residential neighbourhood where emergency responders, local residents, and volunteers worked side by side to remove debris in desperate attempts to rescue trapped students. Unregistered Coaching Centre Under Investigation Preliminary findings from the Punjab government indicate that the coaching centre was operating without official registration inside a privately owned residential building. Punjab Information Minister Azma Bokhari stated that early investigations suggest the building had a deteriorating roof and did not meet acceptable safety standards. She warned that anyone found responsible for negligence or violations of the law would face strict legal consequences. Police have already detained two individuals for questioning while forensic teams continue collecting evidence from the site. Officials say investigations will determine whether criminal negligence, regulatory failures, or unsafe construction practices contributed to the collapse. Lahore Commissioner Marryam Khan has assured the public that the investigation will remain transparent, impartial, and swift. Prime Minister Expresses Grief Prime Minister Shehbaz Sharif expressed deep sorrow over the tragic loss of young lives. He extended condolences to the affected families and directed authorities to ensure the injured receive the best available medical treatment. The Prime Minister also instructed relevant departments to closely monitor the investigation and ensure those responsible are held accountable if negligence is proven. Pakistan’s Recurring Building Safety Crisis The Lahore Tutoring Centre Roof Collapse has revived painful memories of previous building disasters across Pakistan. Experts have repeatedly warned that weak enforcement of construction laws, unauthorized structural modifications, poor-quality materials, and inadequate inspections continue to place thousands of lives at risk. Just last year, a five-storey residential building collapsed in Karachi’s Lyari area, killing 27 people and injuring many others. Similar incidents have occurred across the country, highlighting a persistent failure to enforce building regulations despite repeated tragedies. Education experts are now urging provincial authorities to conduct comprehensive inspections of private schools, coaching centres, and tuition academies operating in residential buildings before another disaster occurs. Growing Calls for Stronger Regulation The tragedy has intensified demands for stricter oversight of Pakistan’s rapidly expanding private tutoring industry. Thousands of coaching centres operate across major cities, many inside converted houses that were never designed to accommodate large numbers of students. Parents, education professionals, and civil society organizations are calling for mandatory structural safety certifications, regular inspections, emergency evacuation planning, and immediate closure of illegal educational facilities that fail to meet minimum safety requirements. The deaths of 14 innocent children have transformed the Lahore Tutoring Centre Roof Collapse from a local accident into a national wake-up call. As investigations continue, families across Pakistan are demanding more than condolences. They are demanding accountability, stronger regulation, and decisive action to ensure that classrooms remain places of learning rather than scenes of unimaginable tragedy.

Commerce Minister Meets KOEN Delegation to Discuss Korean Investment in Pakistan’s Green Energy Sector
Pakistan

Commerce Minister Meets KOEN Delegation to Discuss Korean Investment in Pakistan’s Green Energy Sector

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Islamabad: July 1, 2026: Federal Minister for Commerce Jam Kamal Khan met a delegation of Korea South-East Power Company (KOEN) at the Minister’s Office to discuss the company’s proposed investment in Pakistan’s hydropower sector and matters relating to its two projects in Swat. The delegation was led by KOEN Chief Executive Officer Mr. Kim Min Young and included Mr. Jang Sungkyu, Deputy Chief Executive Officer; Mr. Javid Rashid Chaudhary, Chief Operating Officer; Mr. Asim Javed, Director Finance; and Mr. Shahid Javid, General Manager Project Development. KOEN Presents Progress on Swat Hydropower Projects Mr. Asim Javed, Director Finance, gave a detailed presentation to the Federal Minister on KOEN’s investment profile in Pakistan, progress on its projects, financing arrangements, regulatory approvals and support required from relevant authorities. The delegation informed the Minister that KOEN, a state-owned power company of the Republic of Korea, has been investing in Pakistan’s energy sector since 2011. KOEN successfully completed the 102 MW Gulpur Hydropower Project in March 2020 and subsequently initiated two hydropower projects under the Power Generation Policy 2015: the 229 MW Asrit Kedam Hydropower Project and the 238 MW Kalam Asrit Hydropower Project in Swat. The delegation stated that major project-related studies and approvals have been completed, including feasibility studies, environmental approvals, land-related processes, IRSA consent and grid-interconnection studies. It was further shared that approximately USD 1 billion in debt and equity financing has been arranged, while around USD 25 million has already been spent on project studies and development activities. KOEN Raises Regulatory Concerns The KOEN delegation highlighted concerns regarding the pending tariff determination, inclusion of the projects in the draft Indicative Generation Capacity Expansion Plan (IGCEP) 2025–35, and the need for clarity regarding the future implementation of the projects. The delegation noted that the projects could contribute to clean-energy generation, employment opportunities, local development and increased economic activity in Swat. It added that the company remains committed to Pakistan and is willing to align its commercial plans with the Government’s future energy requirements. Government Reaffirms Support for Foreign Investment Federal Minister Jam Kamal Khan appreciated KOEN’s continued interest in Pakistan and its confidence in the country’s long-term investment potential. The Minister said that Pakistan values its economic relationship with the Republic of Korea and welcomes foreign investment in renewable energy, sustainable infrastructure, technology, logistics and other priority sectors. “Pakistan needs a stable, transparent and investor-friendly environment to attract long-term foreign investment. Clear communication and effective coordination among institutions are important for strengthening investor confidence,” the Minister said. The Minister assured the delegation that the concerned federal ministries, departments and relevant authorities would be engaged to facilitate coordinated consideration of KOEN’s concerns. He said the Government remains committed to supporting credible foreign investors and would extend all possible assistance within the applicable legal, regulatory and policy framework to help bring clarity to the company’s proposed projects. He further noted that Pakistan is reviewing its energy requirements in light of existing capacity conditions; however, future opportunities are expected to emerge in green energy, industrial development, data centres and other growing sectors. He assured KOEN that the Ministry of Commerce would continue to support constructive engagement between the company and relevant stakeholders. The KOEN delegation thanked the Federal Minister for receiving them at his office and expressed hope that continued engagement with the Government of Pakistan would help provide clarity and facilitate progress on the proposed hydropower projects.

Pakistan Inflation Rises to 11.1% in June 2026 Despite Monthly Decline
Pakistan

Pakistan Inflation Rises to 11.1% in June 2026 Despite Monthly Decline

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Pakistan’s headline inflation stood at 11.1% year-on-year (YoY) in June 2026, according to the latest data released by the Pakistan Bureau of Statistics (PBS) on Wednesday. Although inflation remained in double digits, it eased slightly from 11.7% recorded in May 2026, while remaining significantly higher than the 3.2% recorded in June 2025. The latest figures indicate that inflationary pressures persisted during the final month of the fiscal year despite a modest monthly decline in consumer prices. Consumer Prices Fall 0.3% on Monthly Basis According to the PBS, the Consumer Price Index (CPI) declined by 0.3% month-on-month (MoM) in June 2026. This follows a 0.5% increase in May 2026 and a 0.2% rise in June 2025. The monthly decline suggests that while annual inflation remains elevated due to higher prices compared to last year, consumer prices experienced a slight easing during June. Annual Inflation Averages 7.05% in FY2025-26 For the fiscal year 2025-26, average inflation reached 7.05%, compared with 4.49% during the previous fiscal year. The increase reflects sustained price pressures across various sectors throughout the year, despite periods of relative stability in some commodity prices. Urban and Rural Inflation Remain Above 10% Urban inflation continued to outpace rural inflation during June. According to PBS data, urban CPI inflation increased by 11.2% year-on-year, down from 11.8% in May 2026, but considerably higher than 3.0% recorded in June 2025. On a monthly basis, urban inflation declined by 0.5%, compared with a 0.7% increase in May and a 0.1% increase in June last year. Meanwhile, rural CPI inflation stood at 10.9% year-on-year, easing from 11.5% in May 2026 but remaining substantially above the 3.6% recorded in June 2025. On a monthly basis, rural inflation remained unchanged during June after increasing 0.3% in May. In comparison, rural prices had risen 0.5% during June 2025. Government Expects Inflationary Pressures to Ease In its latest monthly economic outlook, the Ministry of Finance said easing geopolitical tensions in the Middle East have improved global market sentiment. The ministry noted that international crude oil prices have retreated from recent highs, reducing imported inflationary pressures and potentially lowering domestic fuel and transportation costs. It projected inflation to remain within the 11% to 12% range for June 2026, broadly in line with the latest PBS figures. The ministry also said lower global oil prices are expected to support Pakistan’s external sector by reducing the country’s oil import bill. SBP Keeps Policy Rate Unchanged Last month, the State Bank of Pakistan (SBP) decided to keep its benchmark policy rate unchanged at 11.5% following a meeting of the Monetary Policy Committee (MPC). The central bank assessed that inflation is likely to remain in double digits over the coming months before gradually easing as domestic and external economic conditions improve. The latest inflation reading will remain a key indicator for policymakers as they assess future monetary policy decisions and monitor the impact of global commodity prices on Pakistan’s economy.

Govt Cuts Regulatory Duties on Imports Under National Tariff Policy 2025-30
Pakistan

Govt Cuts Regulatory Duties on Imports Under National Tariff Policy 2025-30

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The federal government has significantly reduced regulatory duties (RDs) on the import of a wide range of goods from July 1, 2026, as part of its ongoing tariff reform agenda under the National Tariff Policy (NTP) 2025-30. The Federal Board of Revenue (FBR) issued SRO 1064(I)/2026 on Tuesday, replacing Notification No. SRO 1152(I)/2025, to implement the revised regulatory duty structure. The move is aimed at simplifying Pakistan’s tariff regime, lowering import barriers, and improving the competitiveness of businesses by gradually phasing out regulatory duties over the next several years. Maximum Regulatory Duty Capped at 20% Under the revised notification, the government has reduced the maximum regulatory duty from 50% to 20%. For goods currently subject to regulatory duties of 20% or less, the government has introduced a standard 20% reduction in the existing RD rates. However, the reduction does not apply to certain tariff lines carrying regulatory duties of 5%, 2%, and 1%, particularly those linked to export-oriented industries or domestic production, where the existing rates have been retained. The revised structure took effect from July 1, 2026. Part of National Tariff Policy Reforms The latest reductions form part of the second-year tariff rationalisation plan under the National Tariff Policy (NTP) 2025-30. The policy seeks to gradually eliminate regulatory duties by 2030, creating a more transparent and predictable tariff system that supports trade, investment, and industrial growth. As part of the second phase of implementation, the government has also adjusted regulatory duty slabs of 1%, 2%, and 2.5% in line with the broader tariff reform strategy. Objective Is to Reduce Import Barriers According to the government, the tariff reforms are designed to simplify the overall customs duty structure, reduce unnecessary import restrictions, and enhance the competitiveness of Pakistan’s economy. Lower regulatory duties are expected to reduce the cost of importing raw materials, industrial inputs, and other products, helping businesses improve productivity while supporting exports and economic growth. The government believes that a gradual reduction in import duties will also align Pakistan’s trade policies with international best practices and encourage greater integration into global supply chains. The latest notification marks another step in the implementation of the National Tariff Policy, under which regulatory duties will continue to decline in phases until they are completely phased out by 2030.

South Air Receives Caa Air Operator Certificate, Set to Launch Domestic Flights in Pakistan
Pakistan

South Air Receives Caa Air Operator Certificate, Set to Launch Domestic Flights in Pakistan

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Pakistan’s aviation sector is set to expand further after the Pakistan Civil Aviation Authority (CAA) granted an Air Operator Certificate (AOC) to the newly established private airline, South Air, clearing the way for the carrier to begin commercial flight operations across the country. The Air Operator Certificate was issued under the signature of CAA Director General Nadir Shafi Dar. According to aviation officials, South Air is expected to commence its commercial operations within the next few days. CAA Clears South Air for Commercial Operations Officials said the Ministry of Defence and the Civil Aviation Authority provided full support throughout the certification process. CAA Director General Nadir Shafi Dar said the aviation regulator remains committed to promoting the growth and development of Pakistan’s aviation industry by facilitating new entrants while ensuring compliance with safety and operational standards. The issuance of the Air Operator Certificate marks a significant regulatory milestone, allowing South Air to begin scheduled commercial passenger services after completing all required inspections and evaluations. South Air Plans Nationwide Flight Network South Air intends to operate flights to airports across Pakistan as part of its initial expansion strategy. Before receiving certification, the airline successfully carried out test flights to the New Gwadar International Airport and Sukkur Airport. CAA inspectors closely monitored and evaluated these demonstration flights to verify the airline’s operational readiness, safety procedures, and compliance with aviation regulations. The successful completion of these inspections paved the way for the issuance of the Air Operator Certificate. The launch of South Air is expected to increase competition in Pakistan’s domestic aviation market, potentially improving connectivity and offering travelers additional choices for air travel. Pakistan’s Aviation Sector Continues to Attract New Airlines The approval of South Air comes as Pakistan’s aviation market continues to attract new domestic and international carriers. Last year, Saudi Arabia’s low-cost airline, Flyadeal, officially launched flight operations to Pakistan after receiving regulatory approval from the Civil Aviation Authority. The airline’s inaugural flight, F3 166, arrived in Karachi from Saudi Arabia at 8:04 a.m. and received a traditional water salute upon landing at Jinnah International Airport. The CAA had granted Flyadeal permission to operate air services in Pakistan in November 2024 following the airline’s application. Flyadeal currently operates flights between Riyadh and Karachi, with additional services connecting Karachi to Riyadh and Jeddah. According to airline sources, the new services have expanded direct travel options between Pakistan and Saudi Arabia, making travel more convenient for passengers, including business travelers, tourists, and overseas Pakistanis. With South Air preparing to launch domestic operations, Pakistan’s aviation industry is expected to benefit from increased competition, improved connectivity, and greater travel options for passengers across the country.

Govt Creates Petroleum Prices Stabilisation Fund To Tackle Oil Price Fluctuations
Pakistan

Govt Creates Petroleum Prices Stabilisation Fund To Tackle Oil Price Fluctuations

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The Federal Government Has Formally Established the Petroleum Prices Stabilisation Fund (PPSF), Creating a Dedicated Public Fund Aimed at Reducing the Impact of Volatile International Oil Prices on Domestic Petroleum Consumers. The move is expected to provide the government with a structured mechanism to manage fuel price fluctuations while strengthening long-term petroleum pricing policies. The establishment of the Petroleum Prices Stabilisation Fund follows a federal cabinet decision taken on June 5, 2026, and comes as Pakistan continues to face challenges arising from fluctuations in global crude oil prices and increasing fiscal pressures linked to petroleum pricing. Government Creates Dedicated Petroleum Price Stabilisation Mechanism According to an official notification issued by the Finance Division, the Petroleum Prices Stabilisation Fund has been established in compliance with the Federal Cabinet’s decision (Case No. 388/Rule19/2026/462) dated June 5, 2026. The notification states that all proceeds received under the fund will be credited to the Public Account of the Federation through a newly created accounting head. The accounting structure includes Major Head G12 – Special Deposit Fund, Minor Head G123 – Economic Fund, and Detailed Object G12314 – Petroleum Prices Stabilisation Fund (PPSF). The new accounting arrangement formally establishes the financial framework required for operating the fund once the remaining procedures receive government approval. Fund Aims To Cushion Consumers During Oil Price Volatility Officials familiar with the development said discussions on creating the Petroleum Prices Stabilisation Fund had been underway for some time, but recent volatility in international oil markets accelerated the government’s decision to establish the mechanism. According to official sources, several countries already operate similar stabilisation funds to protect consumers from sudden increases in fuel prices. Under such mechanisms, governments accumulate financial reserves when international oil prices remain relatively low. Those reserves can then be used to absorb part of the cost when global crude prices rise sharply, reducing the burden on consumers and limiting sudden increases in domestic petroleum prices. Officials believe a similar model could help Pakistan manage future fuel price shocks more effectively while improving stability in petroleum pricing. Operational Framework Yet To Be Finalised Although the fund has now been established, its operational mechanism has not yet been approved. The Finance Division stated that the detailed framework governing the Petroleum Prices Stabilisation Fund will be prepared jointly by the Finance Division, the Petroleum Division, and the Oil and Gas Regulatory Authority (OGRA). The three institutions will develop the operational procedures while ensuring compliance with all applicable legal, financial, and regulatory requirements. Once completed, the proposed framework will be submitted to the relevant authorities for approval before the fund becomes fully operational. The notification does not specify when this process is expected to be completed. Government Informs Key Institutions The Finance Division has circulated the notification to several federal and provincial institutions responsible for financial administration and implementation. Copies have been sent to the Auditor General of Pakistan, the Controller General of Accounts, the Accountant General Pakistan Revenues, provincial accountants general, and other relevant authorities. In addition, the State Bank of Pakistan, the Presidency, the Prime Minister’s Office, the Cabinet Division, the Ministry of Law and Justice, the Ministry of Energy (Petroleum Division), and provincial governments have also been informed about the establishment of the Petroleum Prices Stabilisation Fund. The broad distribution of the notification reflects the coordination required across multiple government institutions before the fund becomes operational. Provinces Asked To Facilitate Donations The government has also indicated that the Petroleum Prices Stabilisation Fund may receive voluntary public contributions in addition to government receipts. The Finance Division has requested chief secretaries of Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Azad Jammu and Kashmir, and Gilgit-Baltistan to make the necessary arrangements for receiving donations intended for the fund. However, the notification does not explain how donations will be managed or whether they will represent a significant source of financing for the fund. Similarly, no details have been provided regarding additional funding sources that may support the mechanism. Initial Fund Size And Financing Remain Unclear While the establishment of the Petroleum Prices Stabilisation Fund marks an important policy development, several key details remain undisclosed. The notification does not specify the initial size of the fund, the amount of capital the government intends to allocate, or the financial thresholds that would trigger the use of accumulated resources. Likewise, authorities have not yet explained how much funding will be generated through government collections, petroleum-related revenues, or other financial sources beyond voluntary donations. These operational details are expected to form part of the comprehensive framework currently being prepared by the Finance Division, Petroleum Division, and OGRA. Public Awareness Campaign Planned To ensure public awareness, the government has directed the Press Information Department (PID) to widely publicise the establishment of the Petroleum Prices Stabilisation Fund through electronic and print media. The awareness campaign is expected to inform citizens about the purpose of the fund and any future procedures related to voluntary contributions once the operational mechanism is approved. The creation of the Petroleum Prices Stabilisation Fund represents a significant step toward institutionalising Pakistan’s petroleum pricing system. While the framework still requires further approval, the fund is expected to provide policymakers with an additional tool to manage fuel price volatility and reduce the impact of sudden movements in international oil markets on consumers.

SNGPL Burdened by Rs819 Billion Receivables Amid Loan Repayment Struggles
Pakistan

SNGPL Burdened by Rs819 Billion Receivables Amid Loan Repayment Struggles

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The State-Run Gas Utility Sui Northern Gas Pipelines Limited Faces Mounting Financial Challenges. High receivables have placed a significant burden on its operations and liquidity position. Read More: https://theboardroompk.com/germany-crash-out-of-fifa-world-cup-2026-after-paraguay-win-dramatic-penalty-shootout/ SNGPL Requests Extension Of Sovereign Guarantee Till 2030 SNGPL has expressed inability to repay bank loans worth Rs50 billion. These loans were taken to clear receivables of Pakistan State Oil for LNG supplies. The company has sought an extension in the sovereign guarantee from the government. It wants the guarantee extended until June 30, 2030. The current validity is set to expire in June 2026. SNGPL could not propose any viable mechanism to retire the loan amount. The request comes amid ongoing discussions with the Finance Division. The Economic Coordination Committee had approved the facility in 2023. It allowed SNGPL to borrow commercially with sovereign backing. Initially, guarantees were issued to Allied Bank, Faysal Bank and National Bank of Pakistan. The amounts were Rs20 billion, Rs20 billion and Rs10 billion respectively. Later, Meezan Bank took over the entire financing at improved terms. The new rate is three-month Kibor minus 30 basis points. This is expected to result in annual savings of Rs150 million for the utility. RLNG Diversion Adds To Financial Woes Of Gas Utility Diversion of re-gasified LNG to the domestic sector at lower tariffs has worsened the situation. Demand destruction in the captive power sector has further reduced revenues. These factors have made it difficult for SNGPL to meet its liabilities. As of December 2025 the company had total receivables of Rs1,095 billion. Out of this late payment surcharge stood at Rs931 billion. The core primary receivables of Rs819 billion relate to tariff differential. This differential arose from government decisions not to revise consumer prices adequately. It also stems from the policy of diverting expensive RLNG to domestic consumers. The gas sector circular debt has been accumulating since financial year 2013. Inadequate price increases prevented utilities from recovering full costs of gas purchases. Price revisions since November 2023 have helped limit new additions to the debt. However the interest or surcharge component keeps growing. The Petroleum Division informed the economic decision-making body about these primary receivables. Without addressing the stock of old debt the financial strain persists. The situation highlights the need for a comprehensive solution to the gas sector’s structural issues.

Oil Pricing Deregulation: Why Pakistan's Fuel Pricing Formula Is Pushing the Oil Industry Towards Crisis
Pakistan

Oil Pricing Deregulation: Why Pakistan’s Fuel Pricing Formula Is Pushing the Oil Industry Towards Crisis

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Government-Controlled Fuel Prices Leave Oil Companies With No Room to Survive Oil Pricing Deregulation has emerged as one of the biggest demands of Pakistan’s petroleum industry after senior executives warned that the country’s current fuel pricing mechanism is financially unsustainable. According to Usama Qureshi, Vice Chairman of Cnergyico Pk Limited, oil marketing companies (OMCs) and refineries have virtually no authority to adjust fuel prices based on their operational costs because the entire pricing system is tightly controlled by the government. Qureshi argued that the existing pricing framework has become heavily influenced by political considerations rather than market realities. He warned that unless Pakistan introduces comprehensive oil pricing deregulation, the country’s energy sector could face mounting financial stress, reduced investment, and weakening fuel supply chains. Oil Pricing Deregulation Debate Intensifies Qureshi explained that Pakistan’s fuel pricing system lacks fairness because it applies different standards when international oil prices move upward or downward. According to him, whenever global crude oil prices decline, the government quickly passes on the reduction to consumers during the next fortnightly price review. While this earns political goodwill, the opposite approach is adopted when international oil prices rise. Instead of immediately increasing domestic fuel prices, authorities often delay or partially absorb the increase to avoid public criticism. Although this may temporarily protect consumers, Qureshi said the financial burden is transferred directly to oil marketing companies and refineries, which must continue purchasing petroleum products at higher international prices while selling them domestically at regulated rates. The result is a severe squeeze on working capital, reduced liquidity, and growing financial pressure across the petroleum sector. Mandatory Fuel Stocks Are Turning Into Costly Losses One of the biggest concerns highlighted by Qureshi is Pakistan’s mandatory strategic fuel stock requirement. Oil marketing companies are legally required to maintain buffer inventories to ensure uninterrupted fuel availability across the country. These inventories are purchased at prevailing international market prices. However, problems arise when the government unexpectedly reduces retail fuel prices after companies have already acquired expensive inventory. Under the current pricing mechanism, companies are forced to sell these stocks at newly reduced government-notified prices despite having purchased them at significantly higher costs. Qureshi emphasized that the existing formula contains no compensation mechanism for these inventory losses, forcing companies to absorb substantial financial damage every time such price adjustments occur. Industry experts believe this recurring issue discourages investment in storage capacity while weakening the financial health of companies responsible for maintaining Pakistan’s fuel security. Smuggled Fuel Is Creating an Uneven Playing Field Qureshi also warned that the petroleum industry faces another growing challenge beyond regulated pricing: the increasing circulation of smuggled fuel. Unlike licensed oil marketing companies, illegal fuel suppliers avoid taxes, regulatory costs, compliance expenses, and official distribution margins. As a result, they can offer fuel at lower prices, attracting customers while eroding the market share of legitimate businesses. He argued that companies operating legally are forced to comply with strict government regulations, maintain mandatory inventories, invest in infrastructure, and pay taxes, while smugglers operate outside the system without facing similar obligations. This imbalance not only reduces government tax revenues but also threatens the long-term sustainability of Pakistan’s formal petroleum industry. Oil Companies Do Not Decide Petrol Prices Addressing a common public perception, Qureshi clarified that neither oil marketing companies nor refineries determine petrol and diesel prices in Pakistan. Instead, retail fuel prices are calculated under a government-approved pricing formula that considers international petroleum prices, exchange rates, petroleum levy, taxes, freight margins, dealer commissions, and other regulated components before final prices are announced. He stressed that the industry simply implements government decisions and has little flexibility to recover rising operational costs independently. Why Oil Pricing Deregulation Is Becoming Essential Qureshi concluded that Pakistan’s existing pricing formula is no longer compatible with modern energy markets. He called for complete oil pricing deregulation that would allow fuel prices to reflect actual international market movements, operational costs, and domestic demand instead of political timing. According to him, a transparent and symmetrical pricing mechanism should apply equally during both price increases and price reductions. Such a system would improve financial stability for oil companies, encourage private investment in refining and storage infrastructure, strengthen energy security, and create a more competitive petroleum market. As Pakistan continues to face economic challenges and energy sector reforms, the debate over oil pricing deregulation is likely to become increasingly important. Industry leaders argue that without meaningful reforms, the current pricing model could discourage future investment and weaken the country’s long-term fuel supply network.

Pakistan IPO Momentum Defies Regional Uncertainty as Companies Raise Over Rs. 20 Billion
Pakistan

Pakistan IPO Momentum Defies Regional Uncertainty as Companies Raise Over Rs. 20 Billion

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Pakistan IPO Momentum has emerged as one of the strongest indicators of investor confidence in 2026, with companies successfully raising more than Rs. 20 billion through Initial Public Offerings (IPOs) despite geopolitical tensions and economic uncertainty across the region. The first half of the year has delivered a surprising boost to Pakistan’s capital markets. The Securities and Exchange Commission of Pakistan (SECP) approved 10 IPOs for listing on the Pakistan Stock Exchange (PSX), while nine companies have already completed their public offerings. The remaining IPO, LSE SPAC-II, is expected to begin its book-building process shortly. The impressive fundraising performance signals that investors continue to see long-term opportunities in Pakistan’s corporate sector, even as global markets remain volatile. Pakistan IPO Momentum Reflects Growing Investor Confidence The latest IPO figures underline a major shift in Pakistan’s investment landscape. Rather than avoiding new listings during uncertain times, both institutional and retail investors actively participated in public offerings across multiple industries. Market analysts believe the strong response demonstrates confidence in Pakistan’s listed companies and the country’s evolving capital market framework. It also highlights the growing willingness of businesses to seek financing through equity markets instead of relying solely on conventional bank borrowing. The successful IPO cycle comes at a time when regional geopolitical developments have increased uncertainty for financial markets worldwide, making Pakistan’s fundraising achievements particularly noteworthy. SECP Reforms Drive Pakistan IPO Momentum A major factor behind the expanding IPO market has been the Securities and Exchange Commission of Pakistan’s continued regulatory reforms. The regulator has simplified listing procedures, reduced regulatory hurdles and introduced measures aimed at making capital raising more efficient for businesses. These reforms have encouraged both established companies and emerging enterprises to access public investment through the Pakistan Stock Exchange. SECP Chairman Dr. Kabir Ahmed Sidhu reiterated that the Commission remains committed to making stock market listings easier while expanding investor participation across the country. According to the regulator, increasing public ownership in corporate Pakistan is essential for strengthening economic growth and improving access to investment opportunities. Pakistan IPO Momentum Spreads Across Multiple Industries One of the strongest aspects of the current IPO wave is its broad sectoral representation. Instead of being concentrated in a single industry, companies from manufacturing, petroleum, dairy farming, Islamic finance, poultry, real estate and technology successfully entered the capital market. This diversification indicates that Pakistan’s corporate sector is becoming increasingly attractive to investors across different segments of the economy. Among the largest fundraising success stories was Service Long March Tyres Limited, which secured Rs. 7.77 billion. The proceeds will finance a passenger car tyre manufacturing facility in Nooriabad, supporting Pakistan’s industrial expansion and reducing reliance on imported tyres. Another standout performer was Sitara Petroleum, which raised Rs. 4.83 billion. Investor enthusiasm was remarkable, with the IPO becoming fully subscribed in just eight minutes and attracting demand seven times greater than the shares available. The agriculture and livestock sector also made history as Ghani Dairies raised Rs. 3.44 billion, becoming Pakistan’s first listed corporate dairy farming company. Meanwhile, Wahdat Poultry secured nearly Rs. 1 billion to expand its operations. Record Demand Shows Pakistan IPO Momentum Is Accelerating Several IPOs generated exceptional investor demand, reflecting strong confidence in Pakistan’s capital markets. Pak-Qatar General Takaful became Pakistan’s first listed non-life Takaful company and witnessed institutional subscriptions exceeding 21 times the shares on offer. More than 13,000 retail investors also participated, making it one of the most successful public offerings in recent years. The real estate investment sector also expanded significantly during the period with the successful listings of Signature Residency REIT and JS Rental REIT, giving investors new professionally managed real estate investment options. Meanwhile, Pakistan’s first LSE SPAC-I entered the market successfully, while LSE SPAC-II secured regulatory approval and is expected to continue the country’s growing Special Purpose Acquisition Company (SPAC) trend. Technology also strengthened its presence in the stock market through the listing of Select Technologies, highlighting increasing investor appetite for innovation-driven businesses. What Pakistan IPO Momentum Means for the Economy The strong IPO pipeline sends a positive message to both domestic and foreign investors. Higher public participation in equity markets allows businesses to raise growth capital, expand operations, create employment opportunities and strengthen corporate governance through public ownership. It also deepens Pakistan’s financial markets by increasing the number of investment opportunities available to individuals and institutions. If the current pace continues throughout 2026, Pakistan could witness one of its strongest IPO years in recent history, providing fresh momentum for industrial development, technological innovation and long-term economic growth. With regulatory reforms continuing and investor participation expanding, Pakistan’s capital market appears well positioned to support the country’s next generation of corporate growth while attracting greater domestic and international investment.

The Boardroom PK delivers trusted business news, analysis, and insights from Pakistan and beyond, keeping readers informed, inspired, and ahead in the evolving world of business and leadership.

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