Business

Robust demand fuels auto loans

Published

1 day ago

February 18, 2026

KARACHI: Robust demand further pushed outstanding auto loans for the 14th consecutive month to Rs328 billion in January, up from Rs319bn in December 2025.

The State Bank of Pakistan data revealed that consumers opted for more loans in January due to the change of model year and registration, as the growth in December 2025 was slightly slower than in November 2025.

Auto financing has been struggling to beat the peak of Rs368bn recorded in June 2022 when annual car sales volumes were around 240,000 units.

Auto sector expert Mashood Ali Khan said that the current trend shows consumers are increasingly leveraging bank financing to purchase vehicles, contributing to a gradual recovery in automobile sales despite prevailing economic challenges. This is a strong indicator that consumer demand still exists, and it only needs supportive policy to accelerate further.

The growth momentum comes primarily under the State Bank’s existing Rs3 million auto financing cap, enabling a large segment of middle-income consumers to access vehicle ownership. “I believe that the auto sector holds significantly greater potential if financing limits are revised upward to Rs6 to Rs7m.”

By doing this, the auto market will witness a substantial expansion, particularly in the sedan and mid-range vehicle segment, which remains largely inaccessible to financing-dependent consumers under current limits, he added.

“If financing ceilings are increased and interest rates continue to ease, Pakistan’s annual auto sales could potentially cross 200,000 units a year again,” he emphasised.

He said the small-car segment remains the primary beneficiary of financing due to its alignment with the SBP financing cap. A segment of consumers is also seeking to access sedans through partial financing combined with personal savings, highlighting the demand gap created by the current financing ceiling.

Banks are offering more flexible financing options, including comparatively lower markup rates, reduced down-payment requirements, and easier repayment structures. “This has supported recovery, but policy alignment is essential to unlock the sector’s full potential,” he said.

Raising financing limits, while supporting consumers, would also generate broader economic benefits, including industrial production growth, employment generation, vendor development, and increased government revenues through taxes and duties, he said.

He said continued interest rate moderation could further strengthen financing activity in the coming months. “I stress that revising financing limits remains the single most impactful policy intervention to accelerate growth,” Khan said.

Sales are likely to remain upbeat in view of a 137pc increase in imports of semi- and completely knocked-down kits by the local assemblers to $1.144bn in 7MFY26 from $706m in the same period last fiscal year.

Published in Dawn, February 18th, 2026

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Business

Power firms seek Rs1.78 more for January

Published

2 hours ago

February 19, 2026

hussainbinnoman3@gmail.com

ISLAMABAD: After a period of relative stability, power companies have sought additional fuel cost charges of over Rs1.78 per unit from consumers across the country in March bills, as demand appeared to pick up and power generators returned to furnace oil.

The Central Power Purchasing Agency (CPPA) demanded a higher fuel cost on account of power consumed in January, even though almost 60 per cent of the power was generated from domestic, cheaper sources. Electricity consumption was reported to be around 12pc higher than the same month last year and 8pc higher than December 2025.

Once approved, the power companies would charge an additional amount of about Rs16bn to consumers of all the power companies, including ex-Wapda Distribution Companies (Discos) and K-Electric, in the billing month of March. The National Electric Power Regulatory Authority (Nepra) has called a public hearing on February 26 to examine the request for fuel cost adjustment (FCA).

The CPPA, which filed the petition for a higher FCA for January consumption, said the power consumption was around 12.1pc higher than the same month of the previous year and about 8pc higher than the previous month, December 2025. The power companies have claimed an average fuel cost of Rs12.18 per unit for January 2026, compared to Rs11.03 per unit of the same month of the previous year and almost Rs2.56 per unit higher than Rs9.62 per unit in December 2025.

CPPA demands higher fuel charges citing 12pc increase in demand

The CPPA reported that 8,762 billion units (gigawatt hours) of electricity were delivered to Discos in January.

The power companies have claimed that the average fuel cost amounted to Rs12.18 per unit in January, against a pre-approved reference fuel cost of Rs10.395 per unit. There is a need for an additional FCA of about Rs1.78 per unit.

The CPPA said about 9,140GWh of electricity was generated in January at an estimated fuel expenditure of Rs106.4bn (Rs11.64 per unit), of which 8,762GWh of energy was delivered to Discos for Rs106.7bn (Rs12.18 per unit), leading to a higher fuel cost over what was already charged to consumers in December bills. Regasified Liquefied Natural Gas (RLNG)- based power generation accounted for the largest share of the grid’s fuel, with almost 22pc.

This was followed by nuclear power with its 17.5pc share. Traditional hydropower generation dipped to just 8pc in the wake of the annual canal closure for maintenance. Third position was secured by imported coal, with a 17.28pc share, followed by local coal with a 15.4pc share.

The share of local gas-based generation stood at 12pc in January, up from 11pc in December. Furnace oil-based generation revived to 3pc, although the fuel has been officially phased out.

Furnace oil-based generation was the most expensive at Rs33.55 per unit, followed by Rs20 per unit from RLNG, Rs13.5 per unit from imported coal, Rs12.74 per unit from local gas, and Rs11.63 per unit from local coal. There was no power generation from high-speed diesel.

The nuclear fuel cost amounted to Rs2.23 per unit in January. The three renewable energy sources — wind, bagasse and solar — together contributed a 4.55pc share to the grid. Wind and solar have no fuel costs, while bagasse-based plants had a fuel cost of Rs10.39 per unit, with just 1.11pc contribution to the grid. Electricity imports from Iran accounted for 0.38pc of the total, with a fuel cost of Rs22.06 per unit.

Published in Dawn, February 19th, 2026

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Business

Foreign direct investment plunges 41pc to $981 million

Published

2 hours ago

February 19, 2026

hussainbinnoman3@gmail.com

KARACHI: Foreign direct investment (FDI) plunged year-on-year by 41 per cent in the first seven months of 2025-26.

Data issued by the State Bank on Wednesday showed that the confidence of foreign investors further declined compared to the previous year, as their investment during July-January FY26 fell to $981 million from $1.660 billion in the same period of the previous fiscal year.

Experts believe foreign investment will remain under pressure, as the regional situation is not conducive to foreign investors, and the country is also facing terrorism.

The government is struggling to attract foreign investors but failed to achieve any positive results. The State Bank data showed that the highest FDI inflows came from China at $495.5m; however, this was lower than last year’s $857m.

Other significant inflows were from Hong Kong ($188.4m), the UAE ($126m), and Switzerland ($124m).

The inflow of FDI improved in January, reaching $173.3m, but the largest inflow this month was from China, contributing $73m.

However, the largest outflow was to Norway, with disinvestment totalling $365m during the July-January period.

Published in Dawn, February 19th, 2026

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