AGP Executive Report

Oil Refining Upgrade Push: Pakistan’s five refineries are set to sign early-September brownfield upgradation deals worth about $6bn, aiming for Euro-5 compliant, ultra-low sulfur fuels to cut import dependence and boost energy security. Energy Security & Reserves: Petroleum Minister Ali Pervaiz Malik met PSO to review steps for strategic fuel reserves, diversified procurement and stronger buffer storage amid volatile global prices and shipping disruptions. Power Crunch in Punjab: Load shedding worsened as Pakistan’s electricity shortfall rose; Lahore and other Punjab cities reported longer outages, with generation declines and LNG arrival delays adding pressure. Transport Enforcement: Federal Communications Minister Abdul Aleem Khan vowed strict axle-load control with heavy fines, AI monitoring and modern weigh-stations to curb road damage. Gulf Defence Ties: Pakistan and Kuwait signed “Protocol Agreement-2026” for training, capacity building and border management, following closer Saudi and Türkiye security cooperation. Makkah Defence Pact Momentum: PM Shehbaz said the trilateral Makkah Joint Defence Agreement strengthens peace and unity, while Saudi officials met Field Marshal Asim Munir to deepen cooperation in agriculture and environment. Hormuz Diplomacy Under Pressure: Iran says it will draw up conditions to reopen the Strait of Hormuz, linking any normalization to sanctions relief and an end to regional conflict, as Qatar and Pakistan keep mediating. Hospital Safety in Sindh: Sindh announced a complete hospital smoking ban and renewed fire-safety steps after the PIMS nursery tragedy.

Strait of Hormuz Diplomacy: Qatar’s PM/Foreign Minister met Iran’s top diplomat in Tehran to push de-escalation and discuss a framework with Oman for managing the Strait of Hormuz amid US secondary sanctions threats. Energy Cost Pressure: Pakistan’s power regulator NEPRA is set to decide on a Rs2.52/unit fuel surcharge as imported fuel costs rise, with businesses warning of higher September bills. Gas Pricing Reform: The IMF is pushing changes to limit government room to cut gas prices, aiming to curb circular debt, while Pakistan weighs moving from slab-based subsidies to a single fair gas price. Telecom & Power Demand: Telcos say 5G rollout is driving higher electricity needs and urge grid upgrades; they also tout “smart building” sensor systems to prevent incidents like the PIMS fire. Hospital Fire Fallout: A candlelight vigil marked the PIMS nursery blaze that killed 14 newborns as investigators probe the cause and order wider fire-safety reviews. Pakistan-Afghanistan Talks: Islamabad says it’s open to state-level dialogue but demands verifiable action against militants using Afghan soil. Saudi Investment & Airports: Asyad Group reaffirmed interest in Pakistan’s airport privatisation and broader sector investments. Protest Watch: Jamaat-e-Islami announced a nationwide strike on Sept 3 over the petroleum levy.

Telecom Consumer Protection: PTA has ordered mobile operators to give prepaid users at least 180-day validity on every recharge and to automatically restore any expired balance after the next top-up, effective Oct 1, 2026. Gas Sector Reform: Petroleum Minister Ali Pervaiz Malik directed SSGCL to tighten UFG control and develop a sustainable model, while pushing to revisit the slab-based subsidy system and move toward a single fair gas price with targeted protection for vulnerable groups. 5G Expansion: Jazz says it has reached 1,000 live 5G sites (across 10 cities) and targets 2,500 sites by year-end, positioning its multi-band investment strategy for faster capacity and rural coverage. Energy & Trade Geopolitics: Oil prices fell as markets weighed Iran-Oman Strait of Hormuz talks and possible supply improvements, while Pakistan reiterated it will not interpret or comply with unilateral US sanctions on Iran under international law. Airport Privatisation Interest: Saudi Asyad Group signaled interest in Pakistan’s upcoming airport privatisation, seeking to bid with Saudi and international partners. Regional Investment Push: Qatar’s prince met Pakistan’s communications minister, expressing interest in investing in sectors including motorways and highways. Industry & Power: Cement groups are among bidders for GEPCO in the privatization drive, aiming to secure power reliability and reduce grid-related cost risks.

Strait of Hormuz Talks: Iran and Oman are negotiating a temporary shipping corridor and mine clearance, with Tehran insisting the strait stays closed unless the US accepts the Islamabad MoU terms; markets are reacting as oil prices ease on reopening hopes. Pakistan Diplomacy: Reports say Pakistan is shuttling messages between Washington and Tehran to extend a 60-day ceasefire and build an initial framework before talks resume. Energy Markets: Brent and WTI settled lower after choppy trade as investors weighed Hormuz developments and US crude stock data. Hospital Fire in Islamabad: A PIMS nursery fire killed at least 15 infants, with reports pointing to an air-conditioning fault and renewed scrutiny on fire safety in public healthcare. Tech & Influence: OpenAI says Russia-linked actors used ChatGPT to run a covert influence campaign posing as an academic institute, highlighting growing risks for information integrity. Global Disasters: Nepal and Tibet floods and flash floods killed dozens and left hundreds missing, including many foreign tourists and workers tied to hydel projects. Aviation Demand: UK airport passenger numbers hit a record 81m+ in Q2, with Asia showing sharp growth including Pakistan. Shipping & Recycling: Ship recycling sentiment remains positive, with Pakistan leading subcontinent demand for available tonnage.

Hormuz Diplomacy & Energy Markets: Iran and Oman are pushing a phased plan for a temporary Strait of Hormuz shipping corridor and joint mine-clearance, while Iran says the waterway remains formally closed and any reopening depends on US commitments—helping drag oil prices lower as shipping stays subdued. Pakistan’s Mediation Role: Iran’s FM says talks with Pakistan’s army chief and Oman focused on regional solutions, with Pakistan again positioned as a key conduit in US-Iran de-escalation efforts. Hospital Fire Tragedy: A fire at PIMS nursery in Islamabad killed 14 newborns; the Health Secretary was removed and an investigation launched. Power & Energy Governance: The power division directed action to clear net-metering application backlogs and issued tighter coal procurement rules after inefficiencies were flagged. Trade & Finance Signals: Pakistan’s strategic petroleum reserves feasibility study kicked off with Wood Mackenzie, while Moody’s upgraded Pakistan’s sovereign rating to B3 citing improved governance and easing external risk. EU Market Pressure: Brussels raised concerns over Pakistan-administered Kashmir crackdown, warning it could affect GSP+ access tied to export conditions, especially textiles.

US-Iran Economic Pressure: The US launched a fresh sanctions push on Iran under “Operation Economic Outcast,” targeting sectors like digital assets, technology, gold, aviation and shipping, while warning partners of secondary risks; markets reacted with oil easing for a second day as traders priced in lower strike risk. Strait of Hormuz Shipping: Washington said its Navy cleared mines in international waters, while Iran and Oman discussed a phased “temporary joint maritime corridor” plus mine-clearance to restart safe navigation. Pak-Iran Gas Pipeline: Prime Minister Shehbaz formed a high-level committee to break the arbitration deadlock on the stalled Pak-Iran Gas Pipeline, reviewing legal, financial and energy angles to reach a mutually acceptable solution. Energy Costs & Coal Procurement: Pakistan’s Power Division flagged inefficiencies in imported coal discounts and issued guidelines to cut annual losses by about Rs380m. Fuel Prices: OGRA notified a Rs1.12 petrol and Rs1.11 HSD increase for Aug 26-27, with petrol at Rs343.10/litre. Exports & Business Climate: Commerce Minister Jam Kamal Khan told a Senate panel that high power/gas prices and costly financing are hurting exports and pushed for stronger export promotion and market diversification. Competition Ruling: Pakistan’s Supreme Court upheld a Rs50m CCP penalty on PVMA for competition law violations. Housing Finance: Under Apna Ghar, approved housing finance nearly doubled to Rs279b, with applications and disbursements rising sharply. Digital Finance: PVARA said Pakistan has moved from restricting virtual assets to licensing under a Virtual Assets Act framework, aiming to bring activity onshore.

Energy Security & Trade: Pakistan launched a feasibility study for Strategic Petroleum Reserves, with Wood Mackenzie selected after a tender, as Strait of Hormuz risks keep highlighting the need for supply buffers. Markets & Oil: Brent slipped below $90 amid renewed Iran optimism, while investors weighed “economic D-Day” sanctions and broader geopolitical risks. Pak-Iran Gas Pipeline: PM Shehbaz formed a high-level committee to resolve the arbitration deadlock on the Pak-Iran gas pipeline, focusing on legal, financial and energy implications. Telecom Policy: PTA backed rationalising mobile device duties/taxes to improve smartphone affordability while protecting local manufacturing, and NADRA stepped back from Pak-ID facial verification for SIM issuance, pushing operators toward alternative setups. Industry & Corporate: CCP approved IGI Investments’ stake acquisition in Akzo Nobel Pakistan, while Pakistan Steel Mills reportedly received Rs58bn support after a long shutdown. Security & Labour: Armed men killed five labourers in Pishin, Balochistan, underscoring ongoing risks to construction work and regional stability. Terrorism Allegations: Reports say JeM’s Bahawalpur headquarters rebuilt after Operation Sindoor strikes, raising fresh concerns over militant infrastructure.

Olive Oil Push: PM Shehbaz launched Pakistan’s National Olive Value Chain Policy, aiming to cut the $4bn annual edible oil import bill by scaling domestic olive cultivation. Fuel & Pharma Relief: OGRA raised petrol by 39 paisa and HSD by Rs2.40/litre (Aug 25 rates), while the government approved pricing for 52 new essential medicines to improve access. Power Sector Accountability: Senate panel sought NAB/FIA probes into alleged Rs1.282bn irregularities in the Dasu-Islamabad 765kV line project. DISCO Restructuring: Govt decided to sell LESCO and MEPCO “as is,” and also approved restructuring of FESCO/GEPCO/IESCO with major asset/liability transfers. Textile Industry Control: Dr Gohar Ejaz Group retained APTMA leadership for a 17th straight year, citing energy tariffs and taxes as export bottlenecks. VC Bill for Startups: SECP shared a draft Venture Capital Bill with BOI for public consultation to unlock risk capital for startups. Port & Logistics Investment: President Zardari backed integrated development of Keti Bunder Port; Hutchison Ports Pakistan pledged $76m for electrifying Karachi terminal operations. Regional Energy Shock: US unveiled “Operation Economic Outcast” and “economic D-Day” sanctions on Iran, while CDF Asim Munir pushed de-escalation and reopening of the Strait of Hormuz in Tehran. Security on Ground: Five road workers were killed in a Pishin attack targeting a construction site, with Balochistan CM condemning the violence.

Energy Finance Pressure: Pakistan’s energy-sector circular debt climbed to Rs5.286 trillion (gas Rs3.611tr, power Rs1.675tr), with the IMF urging faster reforms, timely tariff adjustments, and loss reduction to stop the build-up. Textile Industry Politics: The Dr Gohar Ejaz group delivered a 24-0 clean sweep in APTMA annual elections, winning key posts including Central Chairman Asad Shafi and North Chairman Siddiq Javed Bhatti. Maritime/Blue Economy: Deputy PM and FM Ishaq Dar pressed the IMO for urgent action to secure the release of 10 Pakistani seafarers held aboard MT Honour 25 off Somalia. Power Sector Legal Relief: Lahore High Court barred disconnection of a domestic electricity connection to recover dues tied to a separate industrial supply. Trade & Logistics Shock: Transporter strike fallout kept freight costs rising and disrupted export movement, hitting supply chains from factories to ports. Regional Security & Shipping Risk: Pakistan’s Army Chief Asim Munir arrived in Tehran as the US prepares new “economic D-Day” sanctions on Iran; Iran warned it may halt Gulf oil exports, keeping Strait of Hormuz transit in focus. Food Industry Push: Saudi Arabia announced Saudifood Show and Saudifood Manufacturing will unite in Jeddah (Sept 27-29), signaling continued regional investment in food manufacturing and trade.

US–Iran Sanctions Shock: The US is set to announce “the toughest” sanctions yet, aimed not only at Tehran but also at its trading partners, as Iran warns it could halt all Gulf oil exports if the “economic war” continues. Hormuz Shipping Pressure: Iran’s Strait of Hormuz authority has published a “Non-Compliant Vessels” list, threatening fines, detention, seizure or confiscation—raising shipping and insurance costs and adding to global fuel price volatility. Pakistan’s Mediation Role: Pakistan’s Army Chief Asim Munir is scheduled to visit Iran to discuss peace efforts and the new sanctions environment, as Islamabad tries to keep US–Iran talks alive. Energy Supply Moves: Pakistan’s ECC is expected to consider a PSO–OQ Oman petroleum products deal, while the government pushes bonded oil storage to strengthen fuel security and reduce import vulnerabilities. Market Impact: Investor sentiment at the PSX weakened amid Hormuz uncertainty and oil price swings. Local Industry Signals: Gold jewellery exporters seek faster reduction in value addition norms; cotton policy faces data gaps despite higher phutti arrivals. Automation & Agri Value: A Pakistani firm explores Chinese robotics for automotive production; FPCCI says expanding oilseed/olive cultivation could save billions in forex.

Pakistan-Iran Mediation: Army chief Asim Munir will visit Tehran on Monday to boost bilateral ties and revive stalled US-Iran talks, with the Strait of Hormuz still the key sticking point. Regional Security Pact: Iran has reportedly been invited to join the Saudi-Turkey-Pakistan “Mecca” mutual defence agreement, though Tehran has not officially confirmed. Sanctions Pressure: Iran’s leadership says new US sanctions threats are “desperate” and will fail, while warning neighbours against joining any US “economic war.” Crypto Regulation: Pakistan Virtual Assets Regulatory Authority notified and legalised regulations for virtual asset service providers, setting out 10 licence categories and AML/CFT requirements. Judicial Probe: Sindh has decided to form a judicial commission to investigate the death of Mir Raza Ali in Karachi, with a report due within 30 days. SME Credit Definition: SBP’s revised SME financing definition raises turnover ceilings, but analysts say it still needs more work to unlock formal credit for small firms.

Middle East Energy Shock: Iran warned neighbours against joining US “economic war,” threatening to disrupt oil exports via the Gulf and Strait of Hormuz, while Egypt and Iran’s top diplomats pushed to restart US-Iran talks. Rail & Infrastructure: Pakistan’s ML-1 railway is moving toward a January 2027 groundbreaking, with the Karachi–Rohri/Sukkur phase (480km) set for new tracks and fencing. Fuel Cost Pressure: A revised dealer margin added Rs1.34 per litre to petrol and diesel, adding to consumer burden amid frequent price adjustments. Flood Relief & Agriculture Reform: PM Shehbaz ordered financial assistance for flood victims and directed NDMA readiness, alongside steps to activate agricultural research and reforms. Economic Stability vs Transformation: Ahsan Iqbal said stability is improving as July exports hit $3.94bn (+13.1% YoY) and industrial activity strengthens, but the focus must shift to sustainable transformation. Trade Deficit Widening: Pakistan’s trade deficit rose 26% in July-2026-27, driven by higher imports of food, machinery, vehicles and metals. Virtual Assets Licensing: Pakistan launched a virtual asset licensing regime with a September 5 deadline for existing operators. Transport Strike Fallout: Exporters warned sea freight charges and lack of shipping space after a goods transport strike caused major losses and missed bookings. Industry Support: Karachi allocated Rs9.25bn for industrial area development, with works targeted for completion by December.

Trade & Industry: Pakistan’s trade deficit widened 26% in July as imports jumped 19%, with higher bills for food commodities, vehicles, machinery, textiles, agricultural equipment, chemicals and metals. Agriculture R&D: PM Shehbaz approved a new National Agriculture Research Centre (NARC) master plan, setting up Centres of Excellence, reference labs, bio-repositories and a private-sector research park, plus a national crop-estimates system. Energy & Power Regulation: NEPRA directed PITC to review pending net-metering solar cases, aiming to clear applicants who completed paperwork months ago. Digital Economy: Pakistan and Google signed MoUs to boost digital transformation and AI skills, including free Gemini access for students and support for IT exports. Remittances via Crypto: PVARA is pushing regulated stablecoins for remittances, targeting up to $400m annual savings by cutting transfer costs. Consumer Pressure: Onion and tomato prices surged sharply, with onion up 132.5% and tomato up 93.2% year-on-year, adding to household inflation stress. Banking/Fintech Security: New banking trojans (Manic, Grandoreiro, ToxicPanda 2.0) are in the spotlight as threats target users and financial services. Transport/City Projects: Sindh’s Sharjeel Memon said Karachi will get 500 electric buses and other transport initiatives, alongside progress on the University Road corridor.

Digital Skills & AI Push: Pakistan and Google signed an MoU to give students free one-year access to advanced AI tools like Gemini, expand Career Certificates to 150,000 in 2026, and set up an AI Centre of Excellence in Islamabad—also targeting growth in mobile apps, gaming, digital payments and AI-enabled public services. Energy Policy Overhaul: The government approved amendments to the National Electricity Plan and the design of an Integrated Energy Plan (2027–60), aiming to tackle power sector structural issues across electricity, gas and petroleum rather than isolated fixes. Fuel Cost Shock: Petrol rose by Rs3.81 to Rs341.59 and HSD by Rs3.59 to Rs368.29 for Aug 22–24, adding pressure on transport and logistics. Inflation Watch: Headline inflation is expected to jump to 11% in August, with food and petroleum costs driving the rise; SPI remains elevated and hits poorer households harder. Power Sector Privatisation: GEPCO privatisation drew 11 EOI bids (including new local and foreign consortia), keeping momentum for distribution reform. Trade & Logistics Stress: Exporters warned that a nine-day transporters’ strike caused massive losses, vessel-space shortages and higher sea freight, urging a permanent mechanism to keep export cargo moving. Balochistan Dialogue: PM Shehbaz invited political leaders to a “grand dialogue” to address legitimate grievances while ruling out violence. Education & Industry Link: IBA Karachi broke ground on its Islamabad campus, while FESCO, LUMS and GIZ held an HR development assessment session for the energy sector. Tech Infrastructure Investment: Zong sought Sindh support for a Tier-III AI-ready data centre in Korangi, with Rs4.07bn already invested and Rs14bn planned over a decade.

Digital Economy Boost: Pakistan and Google signed an MoU to expand digital transformation, with students getting free access to advanced Google AI tools for one year, plus 150,000 Google Career Certificates in 2026 and plans for an AI centre of excellence in Islamabad. Telecom Regulation: PTA cracked down on mobile operators over poor service quality, issuing show-cause notices, warning letters and penalties worth Rs68.9m (with only part recovered). Banking Stability: SBP designated HBL, UBL and NBP as Domestic Systemically Important Banks for 2026, raising capital and supervisory requirements from March 31, 2027. Energy & Industry: Din Textile operationalised a 12.6MW solar expansion. Maritime & Fisheries: Pakistan’s “blue economy” push targets $10bn fisheries revenue, aiming to move from raw exports to deeper processing under the National Fisheries and Aquaculture Policy 2025–2035. Infrastructure & Trade: Karachi-Hyderabad motorway completion is expected by 2028; Islamabad Market Committee issued updated essential food price lists. Education & Human Capital: Groundbreaking held for IBA Karachi’s Islamabad campus in DHA Islamabad.

Insurance Reform: SECP issued draft Market Conduct Rules for Insurers, 2026 for consultation, proposing strict claim and payment timelines and tighter disclosure for policyholders. Energy Governance: CCoSOEs approved independent directors for PPL and OGDCL boards, filling key vacancies in major state energy firms. Fuel Pricing Pressure: Pakistan’s OMCs asked the government to urgently notify a long-pending Rs1.22/litre regulated margin increase, saying costs are piling up while margins remain capped. Power Sector Cost Debate: FPCCI objected to how Nepra plans to recover July fuel-charge adjustments under the ICP, arguing losses should fall on ICP consumers not all users. External Financing Move: IFC and Bank Alfalah signed Pakistan’s first Diversified Payment Rights (DPR) Programme deal, targeting up to $100m in foreign-currency financing via future payment flows. Private Equity Framework: Finance Minister Aurangzeb chaired the first committee meeting to develop a National Private Equity Policy Framework to unlock long-term capital. FDI Repatriation: SBP reported July FY27 profit/dividend repatriation fell 11.5% YoY to $261.4m, led by power and financial sectors. Digital Safety Push: Google launched “Digital Pasban” with PTA and others to equip 200,000 Urdu-speaking households with online safety tools and AI-safety resources. Food Quality Watch: PCSIR testing found excessive trans fats in 26 banaspati ghee samples and quality failures in ghee, cooking oils and milk products. Regional Diplomacy: PM Shehbaz renewed an invitation to PTI for talks, while Pakistan and Syria moved to deepen cooperation after Syria’s FM visit.