- Macroeconomic reforms show promise, but unclear policies and taxes worry investors and businesses alike
- Support for IT, agriculture and exports exists, but development and public trust still lag
Interview with Mohammad Wasi Khan, former Chairman of the Board and CEO — Cnergyico Pk Limited (Byco); Independent Consultant Oil, Energy & Infrastructure.
Profile:
Mohammad Wasi Khan is an independent consultant in the oil and energy sector, advising clients across Pakistan and the broader region on downstream strategy, refinery upgrades, trading dynamics, and energy transition opportunities.
With over four decades of industry experience, he has held top executive roles across refining, oil marketing, trading, and infrastructure development.
He previously served as Chairman of the Board and CEO of Cnergyico Pakistan Limited (formerly Byco Petroleum), where he led major expansions, growth initiatives, and corporate and infrastructure projects. Prior to that, he spent 25 years at National Refinery Limited (NRL), where he held the position of Deputy Managing Director. A number of growth-oriented initiatives, strategic projects, and operational enhancements at NRL are to his humble credit.
PAGE: What impact could the Federal Budget 2025–26 have on the economy of Pakistan?
Mohammad Wasi Khan: Well, this year’s budget clearly shows that Pakistan is sticking to IMF-driven reforms. The focus is on boosting revenue, cutting down untargeted subsidies, and tightening overall fiscal discipline. From an external standpoint, I think these are steps in the right direction — they can definitely help unlock foreign funding and boost investor confidence. But when it comes to the local impact, it’s a bit more complicated. In the short term, higher taxes and reduced public spending will likely put pressure on businesses and households. Demand could soften, and overall economic activity might slow down. That said, if the government sticks with these reforms and implements them consistently and transparently, there’s a fair chance that inflation could ease, and the broader economic outlook could become more stable over time.
PAGE: Which sectors of the economy have been given preferences in the Budget?
Mohammad Wasi Khan: The budget does highlight a few priority sectors. Agriculture, for instance, is getting attention through targeted subsidies and concessional loans. Then there’s the export and IT sectors — both continue to receive support through tax breaks and business facilitation. Another key area is the tax administration itself — which is good to see. There’s funding allocated for digitization and enforcement improvements, and that could really help streamline tax operations and reduce leakages over time. Also, we’ve seen defense spending increase compared to last year — understandable, given the regional situation. But what really stands out is how tight the development spending still is. The government simply doesn’t have much fiscal space right now for large infrastructure or long-term public service projects. Debt repayments are eating up a big chunk of the budget, and with rising costs in areas like defense and subsidies, there’s just not enough left to invest in things like roads, schools, or healthcare at the scale that’s needed.
PAGE: What is your standpoint about the taxation measures taken in the Budget?
Mohammad Wasi Khan: On paper, the government is trying to widen the tax base and collect more through direct taxes — which is the right idea. But in reality, it’s again the salaried class and already-documented businesses that are going to bear the brunt. The informal sector, which really needs to be brought into the net, still remains mostly untouched. Then there’s the issue of trust. If people don’t see public services improving, or if they keep getting caught up in unclear or inconsistent tax rules, they’ll naturally feel discouraged about paying taxes. One big concern is the talk of retrospective taxation — applying taxes to past income. That just adds uncertainty and can easily lead to legal disputes. Honest taxpayers may start feeling it’s not worth the hassle, and that’s something we really can’t afford right now.
PAGE: How do you see the investment scenario in the wake of the Budget?
Mohammad Wasi Khan: At the moment, investor sentiment is still cautious. Yes, there are some early signs of macro stability, but high interest rates, rising energy costs, and policy unpredictability are keeping investment decisions on hold. Take the example of a major unresolved issue — the sales tax exemption for refinery upgrade projects. Despite the Brownfield Refinery Policy being approved, the tax clarity hasn’t come through. That’s been a key reason why the implementation of upgrade plans — a $6 billion investment opportunity — has stalled. It’s been under discussion for years now. Until that’s resolved, the sector risks falling further behind, especially when it comes to energy security, improving fuel quality, and reducing furnace oil production. That said, there are still areas where I see real potential — like renewable energy, logistics, IT, and export-driven industries. But again, for these to really take off, we need more clarity, consistency, and follow-through on policies. Continuity and execution are going to be absolutely critical in unlocking actual investment on the ground.