Author: none@none.com (Khaleeq Kiani)

The government has approved a 9% increase in gas rates for industrial captive power units, effective from July 1, to comply with the IMF’s prior action. However, relief in gas rates for other consumers has been blocked, totaling Rs133 billion. This decision was made during a special meeting of the Economic Coordination Committee (ECC) chaired by Finance Minister Muhammad Aurangzeb. The Oil and Gas Regulatory Authority (Ogra) had recommended a reduction in gas prices for the fiscal year 2024-25. Despite this, Ogra later asked the government to absorb a price cut to finance circular debt instead of providing relief to…

Major Changes Approved to Federal Government’s Pension System: A Brief Overview The Economic Coordination Committee (ECC) recently approved significant changes to the federal government’s pension system, set to be implemented on July 1. The amendments will affect civilians immediately, with the armed forces following suit in the next fiscal year. Under the new rules, gross pension will be based on 70% of the average salary in the last two years of service. Additionally, ordinary family pension will apply for 10 years or for the lifetime of children with special needs. Retirees who are rehired will have the option to retain…

Petrol and Diesel Prices Expected to Increase in July Get ready to pay more at the pump as petrol and high-speed diesel prices are set to increase by Rs7 and Rs8 per litre, respectively, starting July 1. This rise in prices is attributed to the hike in the international market rates for these petroleum products. The government has allowed for a maximum petroleum development levy (PDL) of Rs80 per litre, up from the previous Rs60. Finance Minister Muhammad Aurangzeb has highlighted that the PDL may be gradually increased based on market trends. This increase in prices comes after four consecutive…

Major Changes Unveiled in Finance Bill for 2024-25 The federal budget for the upcoming year has undergone significant revisions, with Finance Minister Muhammad Aurangzeb announcing key amendments to the proposed finance bill for 2024-25. The changes include zero rating on local sales of export industries, stationery items, and continued reduced rates for hybrid electric vehicles. The government is also considering stricter measures for retailers and distributors outside the tax net. Prime Minister Shehbaz Sharif confirmed that the budget was prepared in collaboration with the International Monetary Fund (IMF). He expressed hope for a positive response from the lender, emphasizing the…

Government Highlights Fiscal Risks in Annual Budget Planning The government’s finance team has identified nearly a dozen critical risks that could impact next year’s budget and medium-term outlook. These risks include higher interest rates, currency depreciation, greater subsidy requirements, and challenges in achieving revenue targets. Climate change has been listed as one of the significant challenges that need to be addressed. The Ministry of Finance has called for comprehensive measures to tackle these fiscal challenges. The combination of risks such as higher interest rates, lower revenue collection, and increased subsidies could have a substantial impact on fiscal variables. The government…

In a recent announcement, the National Electric Power Regulatory Authority (Nepra) revealed a significant increase of almost 20% in the uniform national tariff to secure approximately Rs3.8 trillion in funding for the 10 ex-Wapda electricity distribution companies (Discos) for the fiscal year 2024-25. This adjustment, resulting in a Rs5.72 per unit increase, aims to generate an additional revenue of Rs485 billion for Discos and strengthen the government’s position in securing an IMF bailout in July. The average national base tariff is set to reach Rs35.50 per unit, with additional taxes and surcharges pushing it up to Rs42 per unit, thus…

The government is set to reduce petrol and high-speed diesel prices in line with the recent decline in international prices. Petrol is expected to drop by Rs9 per litre and HSD by Rs5 per litre in the upcoming review on June 15. The international market saw a decrease of $3.75 and $2.7 per barrel for petrol and HSD, respectively, over the last two weeks. Despite the decrease in prices, the government has already maximized the Petroleum Development Levy (PDL) at Rs60 per litre, contributing Rs720bn to the treasury. However, the budget target for PDL collection has been revised to Rs960bn…

Summary: The National Economic Council (NEC) approved an indicative national development plan worth Rs3.792 trillion for the next fiscal year, aiming to boost economic growth to 3.6% from the current 2.4%. The federal Public Sector Development Programme (PSDP) was increased by more than 47% to Rs1.4 trillion, along with additional investments in public-private partnership (PPP) projects and state-owned entities. Provincial demands for development projects were met, resulting in a total allocation of Rs2.095 trillion for provincial annual development plans. The NEC decision to continue funding ongoing provincial projects addressed concerns raised by chief ministers of all four provinces, focusing on…

The Oil Industry Protests Pakistan Railways’ Tender Specifications The oil industry is voicing its concerns over Pakistan Railways’ tender specifications that favor imported high-speed diesel (HSD) over locally produced HSD. Adil Khattak, chairman of the Oil Companies Advisory Council (OCAC), has raised the issue with the government, highlighting the impact on local refineries. The tender requires a minimum flash point of 66 degrees Celsius, which aligns with imported HSD standards but not with locally produced HSD, which has a minimum flash point of 54 degrees Celsius. This discrepancy means that Pakistan Railways cannot use locally produced diesel, leading to a…

The National Economic Council (NEC), led by Prime Minister Shehbaz Sharif, is set to convene to review ongoing and future investments and set targets for the next fiscal year, aiming for a 3.6% economic growth rate. The council will consider the 13th five-year plan, review the performance of Ecnec and CDWP, and push to increase the federal Public Sector Development Programme (PSDP) to Rs1.5 trillion, against the Rs1.22 trillion recommended by the APCC. The meeting will review the outcome of the 2023-24 macroeconomic framework, approve next year’s economic priorities, and consider the national investment plan for the next fiscal year.…