AGP Executive Report

Fuel Austerity Shock: Pakistan announced fresh energy-saving austerity as Gulf conflict drives up petrol/diesel and disrupts LNG supplies—official vehicle fuel cut, durable-goods bans (except IT), more teleconferencing, and Islamabad shops/malls closing by 9pm, with tighter rules for weddings and eateries. Defence Pact Signals: Defence Minister Khawaja Asif warned that continued Houthi attacks on Saudi Arabia could trigger Pakistan’s Mecca Joint Defence Agreement, a collective-defence pledge with Saudi Arabia and Turkey. Drone Deal for Industry & Security: US firm Powerus signed an MoU with the Pakistan Army, including an initial drone-related order, with talks also pointing to longer-term capacity building and possible local tech production. Regulatory Clampdown on Cosmetics: Punjab recalled specific Mecodax Injection and Cetirizine batches after lab tests flagged quality issues; CDSCO also issued India-facing alerts over Pakistan-made fairness creams containing excessive heavy metals. Sugar Export Standoff: PSMA rejected a 200,000-ton sugar export quota, arguing stocks and expected crushing season could support at least 1m tons exports. Exports Focus: A new analysis highlights Pakistan’s export concentration in textiles and agro-food, warning that narrow specialisation leaves the economy exposed.

Fuel Relief Standoff: In Karachi, the Pakistan Petroleum Dealers Association refused to join the federal fuel relief scheme unless the subsidy payment mechanism for dealers is clarified, warning petrol stations could shut if the plan is forced through. Power Sector Accountability: Energy Minister Awais Leghari told the National Assembly that load shedding is driven largely by DISCO inefficiencies, citing theft and line losses, and said a major upgrade needs about Rs200bn over 25 years. Petroleum Levy Talks Break Down: Jamaat-e-Islami’s negotiations with the government over the petroleum levy ended without agreement, with JI saying its Islamabad march on Sept 20 is final. Logistics Push: National Logistics Corporation and Pakistan Railways signed a framework to strengthen multimodal freight connectivity, including integrated supply-chain solutions. SME Financing Drive: PM Shehbaz directed SMEDA to expand SME financial support and market access, including digital platforms and wider regional coverage. Industrial Compliance: Sindh Building Control Authority issued urgent fire-safety directives for factories, while Sindh’s Yellow Line BRT depot and Jam Sadiq Bridge work were ordered to be expedited. Wheat Import Moves: TCP received nine bids for 656,000 tonnes of wheat for domestic consumption, as CAP urged allowing private imports to prevent price spikes. Energy Infrastructure Investment: Petroleum Minister Ali Pervaiz Malik met VTTI and Honeywell UOP on refinery upgradation and LPG storage/terminal investment. Mecca Defence Tensions: Pakistan’s defence leadership signalled the Mecca pact could be triggered by escalation around Saudi Arabia and Yemen, as Saudi accused Houthis of targeting Mecca and declared it a “red line.”

Fuel Relief Row: Pakistan Petroleum Dealers Association says it will not participate in the govt’s Rs100/litre petrol relief unless the subsidy payment mechanism is clarified, warning of petrol station closures if dealers are forced to implement the scheme. Energy Pressure: Petrol and diesel prices rose again to Rs384.34 and Rs415.83 per litre as West Asia tensions raise fears of supply disruptions, with authorities discussing options including a possible smart lockdown to cut consumption. Insurance for Construction: SECP proposes reforms to make insurance-backed bid/performance bonds and guarantees clearer and safer for construction and public procurement, aiming to reduce claim delays and litigation. Market Mood: PSX sentiment turned negative as KSE-100 fell about 0.8% amid selling pressure and lingering Middle East supply worries. Regional Security: Pakistan reiterated support for Saudi Arabia after the kingdom said it intercepted a Houthi drone near Makkah, while Turkey and Pakistan said Riyadh has not requested military help under the new Mecca defence pact. Trade & Tech: POWERUS held talks at GHQ on defence technology cooperation; separately, Pakistan’s youth summit in Abbottabad pushed AI and digital skills for employment.

Fuel Prices & Relief: Pakistan raised petrol by Rs4.10 to Rs384.34/litre and HSD by Rs6.41 to Rs415.83/litre for Sept 16, as global refined-product costs climbed amid Strait of Hormuz tensions; meanwhile, the government’s fuel relief push is in focus after ECC approval of Rs75bn and Islamabad’s rollout of a digital subsidised petrol system. Power Cost Control: Power minister Leghari said timely PD decisions cut August FCA to Rs1.73/unit, avoiding an extra Rs10.6bn burden on consumers. Fuel Levy Politics: Sindh Assembly backed a consumer relief resolution seeking petroleum levy abolition, while JI leaders rejected the relief scheme and vowed further protests in Karachi, with rallies planned for Lahore, Mardan and Peshawar. Regulation & Telecom: PTA ordered PTML to halt new ONIC sales/activations under the MVNO framework, allowing a three-month migration window for existing users. Energy & Industry Finance: E&P sector earnings jumped 2.5x YoY in 4QFY26 on tax reversals; Sindh Bank reported a 274% surge in H1’26 PBT to Rs4.05bn. Trade & Exports: PM Shehbaz directed faster, simpler export procedures and higher value-add, while TDAP ran rice aflatoxin-prevention awareness in Punjab. Nuclear Power: Pakistan and IAEA signed safeguards for the 1,200MW Chashma-5 plant, targeting operation in 2028. Auto & Mobility: Bestway/Geely partnership announced bookings before end-2026 and plans for EV and hybrid launches, with local assembly planned in Karachi. Regional Shipping Risk: US said it destroyed two Iranian boats near Hormuz after alleged drone theft attempts; Iran and Gulf shipping authorities continue to trade warnings and restrictions, keeping LNG and oil logistics jittery for Pakistan’s energy market.

Mecca Pact Under Strain: Pakistan’s Defence Minister Khawaja Asif warned that intensifying Houthi attacks on Saudi Arabia could “trigger” the recently signed Mecca Joint Defense Agreement, where aggression against any signatory is treated as aggression against all. Energy & Trade Shock: Saudi alerts over possible attacks in Mecca and Jeddah came as Houthis seized Yemen’s Mocha, raising risks for the Bab el-Mandeb shipping corridor; analysts also warn Saudi’s East–West pipeline outage may last weeks, keeping oil prices elevated. LNG Outlook for Pakistan: Reuters reports LNG demand in Pakistan, China and India is set to rebound after the US-Iran conflict ends as Middle East supply constraints ease and prices stabilize. Fuel Cost Politics in Sindh: The Sindh Assembly unanimously passed a resolution demanding reduction in petroleum prices and abolition of the petroleum levy. Hospital Safety Probe: An inquiry into the PIMS nursery fire found the most probable cause was an electrical fault in AC supply cable No 2, alongside “systematic and institutional failures,” with a key delay in reporting. SBP & Markets: PSX rebounded 1,422 points after SBP held the policy rate at 11.5%, lifting sentiment in autos, cement, banks and energy stocks. Telecom Regulation: PTA ordered PTML to halt new ONIC sales/activations under the MVNO framework, allowing only a three-month migration window for existing users. Agri Value Chain: Pakistan pushed an integrated National Olive Value Chain, targeting plantation expansion and stronger processing, storage and quality systems.

Monetary Policy: SBP kept the policy rate unchanged at 11.5% as inflation risks rise, citing global commodity volatility, tariff adjustments, supply disruptions and El Niño-linked food pressures. Fuel Relief & Refining: ECC approved Rs75bn for the PM fuel relief scheme (targeted weekly/monthly support via a Fuel Pass System) and cleared a draft upgrade agreement for brownfield refineries under the 2023 Pakistan Oil Refining Policy. Oil Shock Hits Markets: PSX slid 2,541 points as Middle East tensions and oil supply fears spooked investors; fuel price hikes also fed cost concerns. Business Pushback: Trade bodies criticised the rate hold as too contractionary, while petroleum dealers urged urgent changes to the fuel relief mechanism over fraud and reimbursement worries. Local Governance: Sindh Assembly passed the Sindh Local Government Amendment Bill 2026, reshaping mayor/administrator powers and adding reporting duties on illegal constructions. Agri & Food Supply: CM Sindh ordered wheat releases to flour mills from Oct 1 to stabilise flour prices; HBL MfB and Suparco expanded climate-smart agri financing in Punjab using satellite monitoring. Industry Updates: PTEA elected Rehan Naseem Bharara unopposed; Port Qasim safely berthed a coal carrier after steering-gear repairs. Geopolitics With Trade Impact: Pakistan warned Yemen-Houthi attacks on Saudi could trigger the Mecca defence pact, raising further Red Sea shipping and energy uncertainty.

Fuel Relief Friction: Pakistan Petroleum Dealers Association says the Rs100/litre petrol subsidy process could be hard to run at pumps, citing fraud risks, invoice checks slowing queues, and dealers being stuck with losses—urging the petroleum minister to revise the mechanism. Monetary Policy: SBP kept the policy rate at 11.5% as MPC weighed improving external buffers against fresh inflation risks from oil spikes and Middle East tensions. Markets Hit by Oil Shock: PSX slid 2,541 points as crude jumped above $100 and investors turned cautious on energy supply and inflation fallout. Middle East Shipping Stress: Houthis tightened control near Bab el-Mandeb and Mocha, raising new risks for Red Sea and global energy flows; Asian refiners also braced for tighter sour crude supply after Saudi pipeline disruptions. Pakistan-Africa Trade Push: Pakistan-Africa Economic Council launched in Islamabad with a goal to triple bilateral trade to $15bn by 2030, focusing on investment, partnerships and value-chain integration. Industry & Policy Moves: Govt cut sales tax on locally made hybrid EVs (up to 2000cc) from 25% to 18%, while Pakistan’s ID card shift from chip to Pak-ID QR codes sparked debate on security trade-offs.

Middle East Security & Energy: Pakistan’s Defence Minister Khawaja Asif warned that Yemen’s Houthi attacks on Saudi Arabia could trigger the new Mecca Joint Defense Agreement with Saudi and Turkey, while PM Shehbaz Sharif again condemned the strikes and pledged efforts to defuse tensions with Saudi Crown Prince MBS. LNG & Power Costs: With US-Iran war disrupting LNG flows via the Strait of Hormuz, Asian buyers including Pakistan are reportedly paying sharply higher spot prices, adding billions in extra fuel costs and pushing a rethink of long-term LNG reliance. Fuel Relief for Industry & Households: The government announced Rs100/litre petrol relief for motorcycles, rickshaws and Qingqi rickshaws, plus cars up to 800cc (up to 30 litres/month), as oil prices keep climbing. Gas Supply Dispute: Pakistan LNG Limited warned K-Electric it may stop RLNG supplies if Rs8.7bn dues aren’t cleared, amid a pricing mechanism disagreement. Industrial Policy & Tax: Steel industry urged FBR to fast-track 2026-27 budget reforms; FBR faced criticism for not implementing a President-directed ADRC decision in an Islamabad taxpayer dispute. Infrastructure & Local Development: KP PDWP approved 14 uplift projects; KPCTA is rolling out adventure tourism training centres; Auqaf officials inspected Data Darbar uplift works. Transport/Trade Pressure: CAP urged Punjab and Islamabad to ease retail operating hour restrictions, warning of weekly losses in sales and tax revenue. Mining Safety: Four miners died and five were injured in a methane gas blast and mine collapse in Harnai, Balochistan.

Middle East Energy Shock: Pakistan’s PM Shehbaz Sharif condemned Houthi attacks on Saudi civilian and economic infrastructure and pledged continued efforts to defuse tensions with Saudi Crown Prince MBS, as Saudi shut a key east-west pipeline after drone strikes—potentially removing up to 4% of global oil supply and raising fuel-price risks. Fuel Relief for Consumers: Shehbaz announced Rs100 per litre petrol subsidy for motorcycles, rickshaws and small cars (up to 800cc), capped at 20 litres for two/three-wheelers and 30 litres for small cars, with rollout starting in Islamabad first. Petroleum Levy Talks Drag On: Govt-JI negotiations on petroleum levy relief were delayed again to Tuesday, while JI escalated pressure with a long march planned for Sept 20. IMF Pressure on Gas Circular Debt: Pakistan will brief the IMF on a three-year plan to clear Rs3.6tr gas-sector circular debt ahead of late-September review talks, targeting tariff differentials and LNG-related cost burdens. Industrial & Trade Links: Pakistan and China pushed new B2B cooperation in advanced manufacturing, AI and digital infrastructure at a CIFTIS 2026 sidelines conference in Beijing. Safety & Security: A methane explosion killed four in a Balochistan coal mine, while Punjab police reported a sharp fall in street heroin availability but a shift toward smuggled pharmaceutical drugs.

Middle East Energy Security: Pakistan strongly condemned drone attacks on Saudi Arabia’s East-West Pipeline, warning the strikes on civilian infrastructure violate international law and could destabilise regional peace. Regional Defence Pact: Defence Minister Khawaja Asif said continued Yemeni attacks could trigger the Mecca Joint Defense Agreement, where aggression against any signatory is treated as aggression against all. Competition & Investment Climate: CCP Chairman Farid Ahmad Tarar showcased Pakistan’s competition reforms at China’s National Fair Competition Conference, highlighting a shift to proactive, intelligence-led enforcement and a Market Intelligence Unit flagging 225+ potential cases. Trade & Africa Push: Commerce Minister Jam Kamal met regional counterparts at the Belt and Road Summit on trade, connectivity and food security, while Pakistan-Africa Economic Council launch targets USD15bn trade by 2030. Industry & Exports: Ambassador Mumtaz Zahra Baloch said textiles and apparel remain central to Pakistan’s exports and jobs, and a Paris cotton-history event underlined cotton’s long role in the sector. Automotive Manufacturing: BYD-MMC confirmed its Gharo NEV assembly plant will go live in H2 2026. Power & Planning: Nepra flagged gaps in demand projections in the Integrated System Plan, warning of surplus capacity and rising capacity payments. Petroleum Costs Pressure: FBR imposed FED of Rs80/litre on three POL products to curb adulteration, while chambers and transporters renewed calls to cut petroleum levy as fuel hikes keep lifting freight and business costs. Karachi Water Infrastructure: KW&SC and FWO signed an agreement for the Rs14bn Dumlottee pipeline to add 10 million gallons daily for Defence and Clifton. Environment Enforcement: Punjab EPA intensified tech-based pre-smog enforcement using thermal drones, inspecting industrial units, brick kilns and food outlets. Digital Assets Regulation: PVARA urged UN-led global rules for digital assets and blockchain to shape next-gen finance for inclusion and access.

Energy Security & Diplomacy: Pakistan strongly condemned drone attacks on Saudi Arabia’s East-West oil pipeline in Riyadh and Madinah, calling them a violation of international law and a threat to regional peace; Saudi temporarily shut the line after damage to pumping facilities, raising global energy-price concerns. Regional Security Pact: Defence Minister Khawaja Asif said continued Yemeni attacks could trigger Pakistan’s newly signed Mecca Joint Defense Agreement, where aggression against any signatory is treated as aggression against all. Power & Cost Pressure: With petrol and diesel prices rising again, lawyers in Chakwal boycotted court proceedings over fuel hikes, while a Lahore High Court petition challenges the increase. Water Quality: PCRWR warned that ultra-low TDS from reverse osmosis isn’t automatically “healthier,” saying minerals may be removed unnecessarily if source water already meets standards. Digital Finance Policy: Pakistan urged UN-led, inclusive regulation for digital financial innovation, including digital assets and tokenisation, to ensure developing countries shape the rules. Business/Tech: realme launched its C100 Series in Pakistan with an 8000mAh battery; OPPO teased Find X10 Pro Max’s triple 200MP camera setup.

Power & Energy Stability: PM Shehbaz ordered nationwide load-shedding capped at two hours per area, citing RLNG supply disruptions amid regional tensions, and directed DISCO-level consumer grievance redressal committees. Electricity Planning: NEPRA approved ISMO’s Integrated System Plan 2025-35 but excluded a proposed USD900m BESS investment and a 2028 K-Electric transmission line pending redressal of observations. Demand-side Push: Pakistan Business Council proposed a framework to stimulate electricity demand across sectors like electric buses, gas-to-grid, agriculture, data centres, railways and industry to spread fixed costs and stabilise tariffs. Tax Enforcement: FBR sharply increased sales tax penalties for digital non-compliance and fake/flying invoices, with harsher punishments from July 1, 2026. Petroleum Levy Row: Govt is considering a Jamaat-e-Islami proposal to gradually cut the Petroleum Levy to Rs5–10/litre and replace up to Rs1.5–1.6tr annually via new taxes, exemptions withdrawal and enforcement; JI’s sit-in against the levy continues. Trade & Agriculture: PM called for expanded global market access and value addition to lift agri exports; Pakistan and Tajikistan agreed to enhance trade and agriculture/food-sector cooperation. Development Pipeline: CDWP cleared seven projects worth about Rs116bn, including TADRA revenue digitisation and an olive cultivation programme. Business & Telecom: Senate IT panel set to review Ufone rebranding, Starlink launch and Etisalat dues; Senate also flagged a sweeping overhaul of Pakistan Post. Industry & Finance Access: SBP and SCCI held EFS and SME financing awareness sessions; FPCCI urged stronger academia-industry links for employability. Market Pulse: PSX recovered after oil eased, closing higher on the day, while weekly performance stayed pressured by Middle East energy risks.

Red Sea Shipping Shock: Iran-backed Houthis seized Yemen’s Mocha and pushed toward Bab el-Mandeb, reaching Perim (Mayyun) and Dhubab, raising fresh risks to global oil and trade routes. Oil & Markets: Brent held above $100 as Hormuz and Red Sea disruptions kept energy prices firm, while PSX moved on oil-led inflation and rate-hike fears. Pakistan’s Diplomatic Posture: Pakistan warned Iran to rein in the Houthis and said no military response was planned under the Mecca defence pact, even as Saudi pressure to act intensified. Agriculture Digital Push: PM Shehbaz backed a nationwide digital system to digitise farmers and land records (Digital Farmers’ Diary/AgriStack) plus Pak-GAP to boost yields and exports. Energy & LNG Relief: Qatari LNG arrivals at Port Qasim eased supply worries amid Hormuz tensions. Weather Watch: PMD forecast monsoon rains, thunderstorms and hailstorms across multiple regions from Sept 12-17. Industry & Trade Moves: Govt cut duties on imported smartphones up to 20% and pushed faster trade/cargo clearance targets; Pakistan also flagged readiness to help rebuild Azerbaijan’s Karabakh via local construction firms. Gold Trend: Gold prices in Pakistan fell Rs5,600 per tola as global bullion eased.

Energy & LNG Relief: Pakistan is set to get fresh Qatari LNG support as tankers approach Port Qasim, easing pressure after earlier supply disruptions tied to Hormuz-linked risks. Telecom Oversight: The NA IT panel summoned Jazz, Zong and Ufone CEOs over poor mobile services, and also questioned NEPRA’s stance on treating telecom as an industry. Finance for Inclusion: PMIC and BII agreed a USD 30m additional lending push for microfinance, with a strong focus on women and underserved clients. Digital Growth Push: ICMA says Google’s entry can help Pakistan move from tech consumption to digital production and exports—if skills, startups, IP and incentives follow. SME & Youth Credit: SMEDA and PMYP signed an MoU to improve financial literacy and business planning for youth and MSMEs under the PM Youth Business & Agriculture Loan Scheme. Transport & Logistics in Sindh: Sindh cabinet approval is being sought for a logistics park and purchase of 500 EV buses to expand Karachi’s mass transit. Workplace Safety Reminder: A PILER seminar revisited the Baldia factory tragedy, blaming weak occupational safety and health enforcement. Markets & Costs: PSX slid over 3,000 points amid oil-price pressure and US-Iran tensions, while petrol/diesel hikes kept squeezing households. Trade Facilitation: PM Shehbaz chaired a Trade Facilitation Board meeting aimed at cutting delays, non-tariff hurdles and improving port and customs performance. Refinery Upgrade: Pakistan’s refinery upgrade agreement has been finalised for ECC approval to improve efficiency and cleaner Euro-V outputs. Regional Shipping Risk: Houthis’ moves around Yemen’s Mocha and Bab al-Mandeb are again raising stakes for Red Sea shipping and energy flows.

Red Sea Energy Shock: Yemen’s Houthis seized Mocha and pushed closer to the Bab el-Mandeb chokepoint, raising fresh risks for global shipping and energy flows as Saudi retaliatory strikes continue. Pakistan Diplomacy: Pakistan said there’s no current discussion of a military reaction under the Makkah Defence Agreement, but it will act “when the time comes,” while also warning Iran to rein in Houthi allies. Fuel & Inflation Pressure: Pakistan’s petroleum minister linked local fuel hikes to global market moves, as another LNG cargo from Qatar was set to reach Karachi to ease supply concerns. Corporate Moves: Cherat Cement plans to acquire at least 30% of NICL, signaling consolidation in Pakistan’s cement-and-chemicals supply chain. Auto & EV Demand: Chery Master Pakistan opened bookings for the all-electric Chery Q at PKR 1.5 million ahead of launch, while Pakistan’s auto policy 2026-31 aims to boost localisation and exports. Finance & Investment: British International Investment reaffirmed plans to expand its Pakistan footprint, targeting infrastructure, climate finance, tech and private markets. Markets & Metals: Gold and silver prices fell in Pakistan in line with global bullion softness amid Middle East uncertainty.

NBP Leadership: National Bank of Pakistan welcomed Imran Sarwar as its new President and CEO, bringing 36+ years of banking experience in risk, credit policy and corporate/investment banking. Auto & EV Policy: PM Shehbaz approved Pakistan’s Auto Policy 2026-31, keeping protection for existing assemblers while offering major tax relief for NEVs and treating hybrids and ICE vehicles equally on duties/taxes. Power Transport Push: Punjab CM Maryam Nawaz set targets for 1,500 e-buses across 91 tehsils from Jan 2027 and 3,000 operational by June 2027, expanding grassroots public transport. Oil & Gas Cost Pressure: Pakistan’s oil industry warned that Middle East crude spikes and frequent pricing changes are squeezing refineries/OMCs and could trigger product shortages; separately, gas consumers may face an extra Rs46bn as security costs for pipeline protection are shifted to tariffs. Trade & Finance Talks: New Zealand’s envoy met Finance Minister Aurangzeb to discuss B2B links and investment as Pakistan sustains reform momentum after Eurobond access. Market Mood: PSX slid about 699 points as Middle East war jitters lifted oil prices and yields. Regional Security: Pakistan warned Iran to rein in Houthi attacks on Saudi Arabia, with the Mecca pact again in focus as shipping and energy risks rise. Agriculture Livelihoods: A global farmer survey found widespread pricing unfairness and income stress, with climate-driven production losses adding to pressure.