Pakistan’s new government may have to roll back fuel, power subsidies

An employee of a fuel station updates the latest fuel price list in Islamabad on February 16, 2022, after a hike in prices of petroleum products. (AFP/File)
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Updated 14 April 2022
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Pakistan’s new government may have to roll back fuel, power subsidies

  • Ex-PM Khan announced cuts in petrol, electricity prices ahead of the no-confidence vote
  • Officials warn Pakistan’s fiscal deficit can go as high as 10 percent of gross domestic product 

ISLAMABAD: Pakistan’s new government led by Prime Minister Shehbaz Sharif is in internal discussions on whether to roll back fuel and power subsidies that have blown a hole in public finances amid a stuttering economy, officials said.
Former premier Imran Khan who was ousted in a confidence vote this week announced a cut in petrol and electricity prices in February despite soaring global prices in a bid to win back popular support.
But that relief measure, estimated at 373 billion Pakistani rupees ($2.06 billion), has stretched government finances in a way that cannot be sustained, the finance ministry’s top bureaucrat said. It has also endangered an ongoing International Monetary Fund rescue program.
“The relief package will add to fiscal deficit which we cannot afford at the moment,” Finance Secretary Hamed Yaqoob Sheikh told Reuters.
“Either it has to be rolled back or compensating reductions in other expenditures would be required to ensure that the primary balance agreed with the IMF is achieved,” he said.
The primary budget balance excludes debt repayment obligations.
The fiscal deficit could go as high as 10 percent of gross domestic product, according to Sharif’s top economic adviser Miftah Ismail, widely expected to be named finance minister.
Sharif met his economic team on Thursday to tackle the subsidies.
“We have been discussing this before (with the previous government) and are discussing it again with the new government as well,” a finance ministry official told Reuters, speaking on the condition of anonymity.
The officials are proposing spreading the subsidies’ roll-back over two to three months to soften its impact, he said, adding that the decision was now with the new political leadership.

IMF BAILOUT
Pakistan is in the midst of a $6 billion IMF bailout program and is yet to clear its seventh review that would release over $900 million and unlock other funding that depends on the fund’s clearance.
The seventh review started in early March, but no agreement had been reached before the collapse of Khan’s government.
“Following the no confidence motion, the IMF stands ready to engage with the Pakistan government and enquire about its policy plans,” IMF’s Resident Representative Esther Perez Ruiz told Reuters.
Pakistan has enough reserves to finance 45 to 50 days’ worth of imports, Ismail said. Foreign exchange reserves held by the central bank fell to $11.3 billion from $16.2 billion in the matter of a month, according to figures released last week.
A reversal of the fuel subsidies will be politically sensitive for the new government trying to shore up popular support at a time when inflation is running at 12.7 percent.
“Either the new government can raise prices which will be politically costly, or they could cover the deficit by reducing other non-development expenditure which will prove politically difficult,” said Kaiser Bengali, a Pakistani economist who has previously held a number of government advisory roles.


Pakistan finmin seeks investments in Washington meetings with Deloitte, IFC executives

Updated 21 April 2025
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Pakistan finmin seeks investments in Washington meetings with Deloitte, IFC executives

  • Aurangzeb discusses cooperation in private sector reforms, energy transition, sound municipal finance, employment with IFC team
  • Pakistan finmin seeks investments in Washington meetings with Deloitte, IFC executivesDiscusses energy reforms, extraction, marketing of critical minerals, privatization, technology, crypto policy with Deloitte executives

KARACHI: Pakistani Minister for Finance and Revenue, Muhammad Aurangzeb, held separate meetings on Monday with executives from Deloitte and the International Finance Corporation and discussed cooperation in multiple areas like energy and private sector reforms and critical minerals.

Aurangzeb left for the US last week to attend the World Bank Group/IMF Spring 2025 Meetings from Apr. 21-26. A statement from his office said on Saturday besides meeting with top officials of the World Bank and the IMF, the finance minister would also meet with finance ministers and counterpart leaders of China, the United States, United Kingdom, Saudi Arabia and Turkiye and officials of global credit rating agencies, commercial and investment banks.

On Monday, Aurangzeb met Hela Cheikhrouhou, Regional Vice President of the International Finance Corporation, and her team.

“Both sides explored cooperation in the areas of private sector reforms, energy transition, sound municipal finance and full employment,” a statement from the finance ministry said. “The Minister appreciated the lead role of IFC in raising $2.5 billion in debt financing for Reko Diq Copper & Gold Mine Project in Balochistan. 

Aurangzeb also separately met with a team from Deloitte and briefed them on Pakistan’s macroeconomic outlook, the government’s sectoral development agenda and export-led growth priorities, the finance ministry said. 

“Explored cooperation in the areas of energy sector reforms, extraction and marketing of critical minerals, privatization, technology, crypto policy and operationalization of Country Partnership Framework (CPF),” the statement added. 


Pakistan extends detention for ethnic rights activist Dr. Mahrang Baloch

Updated 21 April 2025
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Pakistan extends detention for ethnic rights activist Dr. Mahrang Baloch

  • Detention of the most prominent rights activist of the Baloch minority extended for 30 days 
  • Baloch was charged with “terrorism,” “sedition,” “murder” after she took part in sit-in protest last month

QUETTA, Pakistan: Pakistan extended the detention of the most prominent rights activist of the Baloch minority for 30 days on Monday after she was charged with “terrorism,” “sedition” and “murder,” her lawyer told AFP.
Mahrang Baloch, 32, has long campaigned for the Baloch ethnic group, which claims it is targeted with harassment and extrajudicial killings in the Balochistan province. The state denies involvement. 
She was detained on March 22 for 30 days but “the government has issued another notification ordering to detain her for 30 days more,” her lawyer Imran Baloch said.
A dozen UN experts called on Pakistan in March to immediately release Baloch rights defenders, including Mahrang, and to end the repression of their peaceful protests.
The judiciary declined to rule on her detention a week ago, effectively halting any further judicial appeal and placing the matter solely in the hands of the provincial government of Balochistan, which borders Iran and Afghanistan.
Mahrang took part in a sit-in protest in the provincial capital, Quetta, in March to demand the release of members of the Baloch Yakjehti Committee, a group she founded to organize protests.
Since 2009, Baloch protesters have gathered in the vast and mineral-rich province — where 70 percent of the population lives in poverty — demanding justice for what they claim are extrajudicial killings, enforced disappearances, and arbitrary detentions.
Pakistani authorities reject these as “baseless allegations.”
Pakistan has been battling a separatist insurgency in Balochistan for decades, with militants targeting state forces and foreign nationals.
Separatists accusing outsiders of plundering the province’s natural resources launched a dramatic train siege in March in which officials said about 60 people were killed, half of whom were assailants.
Mahrang was barred from traveling to the United States last year to attend a TIME magazine “rising leaders” awards gala.


Popularity of Himalayan salt grows in China as Pakistan exports reach $1.8 million in FQ25

Updated 21 April 2025
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Popularity of Himalayan salt grows in China as Pakistan exports reach $1.8 million in FQ25

  • Pakistan sees 40 percent increase compared to exports in same period last year
  • Himalayan salt export driven by increasing Chinese interest in health-oriented products

ISLAMABAD: Pakistan exported $1.83 million (Rs512 million) worth of salt to China in the first three months of 2025, an increase of 40 percent compared to the same period last year, state-run media reported on Monday, showing the growing popularity of the product in the Chinese market. 

Pakistan primarily exports salt to the United States, Canada, China, the United Kingdom, and Japan. Other significant destinations include Afghanistan, the United Arab Emirates, and Vietnam. Pakistan’s salt exports are known to be mined at the Khewra Salt Mine and surrounding deposits. 

The Khewra Salt Mine is one of the world’s oldest and second largest, turning out 325,000 tons of salt a year. The mine is renowned for producing Himalayan pink salt, which is popular globally for its unique color and health benefits. The mine contributes significantly to Pakistan’s exports, especially to China, and is also a major tourist attraction due to its historical and geological significance.

“Pakistan exported over 13.64 million kilograms of salt to China worth $1.83 million (Rs512 million) in the first quarter of 2025 whereas last year in the same period it was $1.3 million (Rs364 million),” the Associated Press of Pakistan said in a report, quoting Ghulam Qadir, the Trade and Investment Counsellor of Pakistan in Beijing.

“Pakistan is exporting salt to China under three categories, edible salt, pure sodium chloride and other salt.”

The report attributed the increase to better trade ties between the two nations and China’s increasing appetite for premium-grade edible salt as well as for salt for industrial consumption, particularly for use in the chemical, pharmaceutical and food processing sectors. 

Industry experts attributed Pakistan’s salt export growth to “improved logistics, competitive pricing and enhanced quality standards” adopted by Pakistani exporters.

“This surge is a testament to Pakistan’s expanding capacity to meet international market demands, and a positive sign for diversifying our exports to China,” the report said, quoting a Trade Development Authority of Pakistan official.
 


Militant ‘ringleader’ among six insurgents killed in northwest Pakistan — army

Updated 21 April 2025
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Militant ‘ringleader’ among six insurgents killed in northwest Pakistan — army

  • Military conducts frequent operations against militants it claims launch attacks from safe havens in Afghanistan
  • Militants have intensified attacks on army and its bases since revoking ceasefire with government in late 2022

ISLAMABAD: The Pakistan Army said on Monday a militant “ringleader” was among six insurgents killed in two intelligence-based operations in the northwestern Khyber Pakhtunkhwa province.

In recent months, the military has launched frequent operations in the restive Khyber Pakhtunkhwa province bordering Afghanistan. The army’s target in the area is militants it says launch attacks inside Pakistan and against the army using safe havens in Afghanistan, a charge Kabul denies. 

Groups like the Pakistani Taliban, commonly known as the Tehreek-e-Taliban Pakistan (TTP), have been waging a war against the Pakistani state for nearly two decades in a bid to overthrow the government and replace it with what they consider an Islamic system of governance.

“On 20-21 April 2025, six Khwarij [militants] were sent to hell in two separate engagements in Khyber Pakhtunkhwa Province,” the army said in a statement.

One operation was in the South Waziristan district, where the army said militant “ringleader” Zabi Ullah was killed. The statement said he had “remained actively involved in numerous terrorist activities against security forces as well as in target killing of innocent civilians and was highly wanted by the Law Enforcement Agencies.”

Another intelligence-based operation was conducted in Razmak, North Waziristan District, in which five militants were killed. 

Militants have intensified their attacks since revoking a ceasefire with the government in late 2022, with recent months witnessing significant strikes targeting the military and its bases.


Pakistani religious parties announce Gaza rally at Lahore’s Iconic Minar-e-Pakistan

Updated 21 April 2025
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Pakistani religious parties announce Gaza rally at Lahore’s Iconic Minar-e-Pakistan

  • Religious parties say are forming new pro-Gaza platform called Majlis-e-Ittehad-e-Ummat
  • Platform to launch nationwide awareness campaigns to boycott Israeli products and companies

ISLAMABAD: The chief of Pakistan’s main religious-political party, the Jamiat Ulema-e-Islam F (JUI-F), said on Monday the JUI-F and other religious parties would stage a protest rally in solidarity with Palestinians at the iconic Minar-e-Pakistan monument in Lahore on Apr. 27.

The move follows a Gaza Solidarity March organized by another religio-political party, Jamaat-e-Islami (JI), on a main road connecting Islamabad and Rawalpindi last week that was attended by thousands. 

“A very big rally will be held at Minar-e-Pakistan in Lahore on Apr. 27 along with a protest,” JUI-F chief Maulana Fazlur Rehman said on Monday at a press conference in Lahore alongside JI chief Hafiz Naeem-ur-Rehman.

“We all will participate along with other religious parties. We are forming a new platform now by the name of Majlis-e-Ittehad-e-Ummat.”

He also said nationwide awareness campaigns would be launched by the platform to boycott Israeli products.

Separately, the JI has announced a nationwide strike on Apr. 26 in solidarity with Palestine and urged citizens to boycott brands that support Israel amid its ongoing military offensive in Gaza.

Pakistan does not maintain diplomatic relations with Israel and has for decades condemned its military actions in Gaza.

Islamabad has called for the immediate resumption of humanitarian aid to the besieged enclave and a revival of negotiations toward a two-state solution. The country has long supported the establishment of an independent Palestinian state based on pre-1967 borders, with East Jerusalem as its capital. 

Since October 7, 2023, when Israel launched its latest military assault on Gaza, more than 51,000 Palestinians have been killed and over 116,000 injured.