ISLAMABAD: The Competition Commission of Pakistan (CCP) has stressed that a competitive automobile industry can deliver significant benefits to consumers and the economy, including lower prices, improved quality, greater choice, and enhanced export potential.

Unveiling a comprehensive report, “The Road to Fair Competition — A Study of Pakistan’s Automobile Industry”, the watchdog on Monday highlighted structural and regulatory challenges in the sector and recommended wide-ranging reforms, including a long-term policy roadmap, improved vehicle financing, and removal of regulatory distortions to foster competition and efficiency.

The commission expressed the hope that the study will inform policymakers, regulators, and industry stakeholders and support the development of a modern, competitive, and globally integrated automobile sector in Pakistan.

The automobile industry remains a cornerstone of Pakistan’s economy, contributing approximately 2.8 per cent to GDP and employing more than 215,000 people directly. As a key segment of Large-Scale Manufacturing, it plays an important role in industrial growth, technology transfer, and domestic value addition, particularly in the passenger car segment, including emerging electric vehicles.

The CCP study finds that despite successive policy interventions, the passenger car market remains concentrated in several engine categories due to high entry barriers, capital-intensive requirements, and regulatory complexities. While past protectionist policies helped establish domestic manufacturing, prolonged tariff protections and localisation measures have not consistently translated into competitive outcomes or export-led growth.

The report also highlights fragmentation in the regulatory framework, with overlapping institutional mandates and policy inconsistencies affecting investment and industry development.

Although previous auto policies aimed to increase localisation, attract new entrants, and promote exports, structural rigidities, policy reversals, and weak implementation limited their effectiveness.

To address affordability constraints and stimulate demand, the CCP has recommended expanding access to auto financing by reviewing restrictive financing limits and introducing targeted, subsidised schemes for first-time buyers in coordination with financial regulators.

The study emphasises the need for a predictable and coordinated transition to electric vehicles, noting that inadequate charging infrastructure, limited domestic production capacity, and reliance on fossil-fuel-based electricity remain key barriers.

Published in Dawn, March 3rd, 2026

• Index sees unprecedented plunge of over 16,000 points, inflicting Rs1.7tr loss in a single day
• Conflict shakes investor confidence as they lose over Rs4 trillion since January peak

KARACHI: The Pakistan Stock Exchange (PSX) on Monday witnessed the steepest single-day plunge, which inflicted unprecedented losses of Rs1.74 trillion on panicky investors who rushed to exit as the assassination of Iran’s supreme leader, Ayatollah Ali Khamenei, in airstrikes by the US and Israel sabotaged Middle East peace, caused a rout in world equity markets and fuelled a surge in oil and gas prices amid growing fears of supply disruptions as Tehran retaliated.

Violent protests breaking out across the country in the wake of Khamenei’s assassination, causing dozens of deaths in clashes with security forces, also contributed to depressed market sentiment.

Panic-driven sell-offs dragged the benchmark KSE-100 index below the 152,000 level, marking the largest single-session decline in the bourse’s history. Since the all-time peak on Jan 23, the index has tumbled by 37,193.83 points, or almost 20 per cent, causing a cumulative loss of over Rs4.03tr in market capitalisation.

Topline Securities Ltd said Pakistan equities opened the session on an exceptionally bearish note, with aggressive, broad-based selling pressure gripping the market. The KSE-100 index posted its largest-ever single-day decline, shedding 16,089 points, or 9.57pc, to close at 151,973 points.

The steep correction was largely driven by widespread panic selling from both retail and institutional investors, compounded by the market’s previously overbought condition. Amid heightened volatility, trading activity was suspended after the index plunged almost 9pc for one hour shortly after the opening bell, to stabilise market conditions, in line with a risk management rule set by the PSX.

Heavyweight constituents, including Fauji Fertiliser Company, United Bank Ltd, Engro Holdings Ltd, Hub Power Company and Meezan Bank Ltd, exerted substantial downward pressure, collectively eroding 5,167 points from the benchmark index.

Amid a pronounced decline, trading activity reflected steep selling pressure, with trading volume increasing 50.96pc to 809 million shares and traded value surging 89.94pc to Rs48.5bn. K-Electric dominated the volume leaderboard, with more than 163 million shares. Ali Najib, deputy head of trading at Arif Habib Ltd (AHL), said selling pressure dominated from the opening bell, with the index falling to an intraday low of 152,991, down 15,071.01 points (8.97pc) in the first five minutes of trading, triggering a trading halt.

After trading resumed at around 10.22am, the market staged a strong technical rebound, with the index recovering over 6,000 points to reach an intraday high of 159,329. However, the recovery proved short-lived, as renewed selling pressure in the final hours erased gains and pushed the market to its day’s low close.

Major laggards included Fauji Fertiliser, United Bank, Engro Holdings, Hub Power, Meezan Bank, Oil and Gas Development Company, Habib Bank, Lucky Cement, MCB Bank and Pakistan Petroleum, which collectively shaved 8,148 points off the index.

Developments on the geopolitical front will remain a key determinant of market direction. Continued escalation could prolong volatility and exert further pressure on investor sentiment. Conversely, any meaningful signs of stability or de-escalation may help restore confidence, reduce risk premiums and pave the way for a gradual recovery in the equity market.

Shankar Talreja of Topline Research said Iran had also aggressively targeted multiple US bases in Middle Eastern countries, including Bahrain, the UAE, Qatar and Saudi Arabia, and directly attacked Israel over the weekend following the assassination of Khamenei and other top Iranian civil and military leaders.

“As a result, the airspace of Middle Eastern countries has also been closed, and some countries and states, including Dubai, Abu Dhabi and Kuwait, have announced the temporary suspension of their stock exchanges. The war-like situation is continuing, and experts believe that the conflict may continue for a month,” he noted.

For Pakistan, although the involvement is not direct, there are economic implications, including higher oil prices due to its heavy dependence on imported oil, which could spike inflationary pressures. Investors’ confidence could also weaken investment prospects in the country due to hostility on both the eastern and western borders of Pakistan.

Global oil and gas prices surged as retaliation by Tehran forced shutdowns of oil and gas facilities across the Middle East and disrupted shipping in the crucial Strait of Hormuz, which accounts for 20pc of the world’s oil supply, and which Saudi Arabia, the UAE, Kuwait, Iraq and Qatar largely use to export oil. A sustained rise in oil prices would endanger a global economic recovery and fuel inflation.

Brent crude futures rose as much as 13pc to $82.37 a barrel, their highest since January 2025, before retreating to trade up $4.92, or 6.75pc, at $77.79 a barrel at 1606 GMT. US West Texas Intermediate crude was up $3.87, or 5.77pc, at $70.89, having risen more than 12pc to $75.33, its highest since June.

The brokerage house noted that, due to the evolving nature of the conflict and the involvement of various countries, volatility might continue until the conflict is resolved.

However, any further fall in the index level may provide an attractive entry point for investors, as Pakistan’s recent reforms have created a decent buffer (reserves level) for absorbing external shocks.

Furthermore, the government would continue to adopt cautious policies to navigate this period. Mr Talreja said the Pakistan market had again returned to an attractive level below a 6.5x 2027 price-to-earnings ratio, lower than the historic average of 6.9x.

Pakistan’s annual petroleum imports, including crude, refined products, LNG and LPG, stand at $15-16bn. Every 10pc change in oil prices can increase the petroleum import bill by $1.5-$1.6bn. Other products directly linked to oil prices include edible oil ($4bn in imports), coal ($1bn) and rubber and tyres ($1bn).

Rising oil prices will also affect inflation, directly and indirectly. The brokerage house observed that expectations of higher imports and growing concerns in the Middle East might weaken the rupee.

Published in Dawn, March 3rd, 2026

ISLAMABAD: Amid disruption to LNG imports from Qatar, the government on Monday decided to keep translating the impact of rising global oil prices to consumers under the existing fortnightly pass-through mechanism to avoid a fiscal bulge amid close monitoring of supplies.

A meeting of the newly created 18-member cabinet committee, constituted by Prime Minister Shehbaz Sharif to monitor petroleum prices in the wake of the emerging situation in the region, was told that petrol and diesel stocks in the country were sufficient for almost a 30-day cover but Qatar Gas had closed its liquefied natural gas (LNG) facility after it came under Iranian attack.

Official communication from Doha about the latest situation was, however, still awaited. LNG supplies would nevertheless not be available beyond a few cargoes that had already crossed the Strait of Hormuz towards Karachi.

The 18-member cabinet body constituted by the prime minister included the ministers for petroleum and power; the State Bank of Pakistan governor; the secretaries of petroleum, power and finance; the chairman of the Oil and Gas Regulatory Authority; the managing director of Pakistan Refinery Limited; and representatives of Inter-Services Intelligence and the Intelligence Bureau, among others.

The meeting focused on the impact of the closure of the Strait of Hormuz and authorities concerned were directed to explore alternate supply routes.

It was reported that while there was no emergent situation, Saudi supplies of finished products could be routed through the Red Sea, while UAE imports through Fujairah were beyond the troubled route.

According to an official handout, the committee also undertook a comprehensive stocktaking exercise and deliberated on all matters within its mandate.

Members reviewed trends in forward and futures prices of petroleum products, assessed the resilience of regional and international supply chains amid the evolving geopolitical environment, examined potential short and medium-term foreign exchange implications of price volatility, and evaluated measures to prevent supply disruptions while ensuring uninterrupted domestic availability of petroleum products.

The possible fiscal impact of a prolonged conflict was also considered, but there was a lack of visibility due to uncertainties.

A detailed assessment of global oil market conditions was presented, including movements in international benchmarks, freight and insurance costs, shipping route dynamics, and alternative sourcing options.

Various supply and pricing scenarios were evaluated to ensure preparedness under different contingencies. It was, however, noted that these costs would become clear once the London market started business and would show the latest trends which could be discussed later this week as the committee would be meeting regularly.

The committee was informed that national stocks of petroleum products were presently at comfortable levels.

According to the handout, the finance minister was quoted as saying that there was no immediate supply stress and that maintaining market confidence and orderly conditions remained essential.

While acknowledging that the international environment was fluid and evolving, he noted that Pakistan’s energy supply chain remained stable and fully functional.

The committee also noted that closure of the Strait of Hormuz and tensions around the Bab-el-Mandeb Strait were major challenges for global energy security. “If the situation persists, then it may have implications for Pakistan’s energy supply chain,” the handout said.

It further quoted Aurangzeb as saying that the committee would operate as a strategic governance forum to continuously monitor developments and undertake structured scenario planning.

“He underscored that ensuring the availability of energy supplies across the country was the government’s primary objective and would remain the central driver of all decisions,” the statement said.

He directed all relevant entities to intensify coordination, validate physical stock positions, closely track shipments and storage, and remain fully prepared to respond to emerging developments.

He further emphasised that any decisions taken by the committee would be implemented with clarity and transparency.

“Pricing implications arising from international market movements, where unavoidable, will be addressed through established mechanisms in a predictable and orderly manner to avoid distortions or abrupt adjustments,” the statement said.

The meeting also reviewed LNG and liquefied petroleum gas (LPG) supply positions, shipment schedules, terminal operations, and line-pack considerations.

According to the statement, the relevant ministries were tasked with refining comparative scenario assessments, including economic and fiscal trade-offs associated with alternative fuel utilisation and demand management options.

To ensure continuous oversight and institutional readiness, it was decided that the committee would convene daily, with structured data consolidation followed by formal review, it added.

“This mechanism will enable real-time monitoring of international price movements, domestic stock levels, foreign exchange exposure, and supply chain developments,” the statement said.

Concluding the meeting, Aurangzeb reaffirmed that the government was closely monitoring the situation at the highest level and that proactive measures were firmly in place. He assured the public and market participants that there was no cause for concern.

“Energy supplies remain stable, governance mechanisms are fully operational, and comprehensive contingency planning is actively underway to safeguard national interests,” he was quoted as saying.

The cabinet committee is required to determine the foreign exchange implications of oil price volatility for the short and medium term and suggest measures to ensure uninterrupted supplies of oil products and markets stay adequately supplied.

It is also tasked with carrying out a detailed analysis of the fiscal impact in the event of a prolonged conflict and reviewing the broader effects of the war on Pakistan’s economy. It will submit its regular reports to the prime minister.