Pakistan cabinet ratifies Kuwait defence pact, shifts KP chief minister's powers to governor and unveils LPG auction plan
Prime Minister Shehbaz Sharif's federal cabinet has ratified the Pakistan-Kuwait defence cooperation agreement, transferred the Khyber Pakhtunkhwa chief minister's delegated powers to Governor Faisal Karim Kundi during governor's rule, and announced a competitive auction system for liquefied petroleum gas quotas.
Pakistan's federal cabinet has ratified the defence cooperation agreement between Pakistan and Kuwait, completing Islamabad's side of a pact first concluded in June 2023 and already ratified by Kuwait, while also taking a series of domestic decisions on provincial governance, fuel supply and currency design.
The cabinet meeting, chaired by Prime Minister Shehbaz Sharif on Wednesday, approved the agreement on the basis of a handout from the Prime Minister's Office, which said the accord was concluded on 11 June 2023 to strengthen defence cooperation and institutional linkages between the armed forces of the two countries. Kuwait had ratified the agreement on 19 July, according to the same statement.
The framework covers military training and education, intelligence sharing, logistics, defence technology, research and exchanges of expertise, and it is to remain in force for five years, with automatic renewal unless either side decides to terminate it. For Pakistan, the ratification matters less as a single arms deal than as a formal structure for regular military contact with a Gulf partner at a time when Islamabad says it is also pursuing diplomatic efforts to ease tensions across the Middle East.
The most consequential domestic decision concerned Khyber Pakhtunkhwa, where the cabinet transferred the powers delegated to the chief minister to Governor Faisal Karim Kundi for the conduct of day-to-day affairs during the emergency period. The Centre had declared an emergency and governor's rule in the province on 11 October, after talks with the main opposition and the then-ruling party failed, leaving the chief minister's office non-functional.
Under the arrangement, the governor will submit a monthly report to the federal government reviewing how the transferred powers have been exercised, a safeguard intended to keep the emergency administration accountable while routine government business continues. The cabinet also welcomed the work of the KP Advisory Council led by Governor Kundi and expressed hope that it would work for the welfare and prosperity of the province and for peace and security there.
Alongside the governance change, the prime minister announced that a development package of Rs160 billion had been finalised for Khyber Pakhtunkhwa, with security given priority. The package sits within a wider federal effort to pair administrative continuity in the province with visible spending on development and security, although the detailed breakdown of projects within the Rs160 billion has not yet been published.
On energy, the cabinet unveiled a competitive and transparent mechanism for allocating LPG quotas, ending what the prime minister described as a decades-old monopoly in the sector. Locally produced LPG will be offered through competitive auctions under proper supervision, while importing companies will be required to follow prescribed procedures, with state institutions including Pakistan State Oil, Pakistan LNG Limited and Parco Pearl Gas involved in imports.
The numbers explain why the government is treating LPG as a winter priority. Pakistan needs about 7,000 tonnes of LPG a day, of which only about 2,500 tonnes are produced locally, and supply has been disrupted by the closure of Iranian border crossings, with cylinders reported selling at twice the official rate in the open market. The prime minister said LPG imports would now be opened to competition, that locally produced LPG would be auctioned in lots, and that the resulting profits would be used to subsidise the fuel for ordinary consumers.
The cabinet also extended the fuel subsidy scheme until the end of December. The prime minister said about Rs28 billion had already been spent on the programme, which he said had benefited more than 15 million people directly through tokens, and that the government had prevented a Rs15-per-litre increase in petrol prices from being passed on to consumers after a rise in international prices, with refineries asked to absorb the burden from windfall profits.
In a further decision, the cabinet approved new currency note designs on the Finance Ministry's recommendation and the introduction of a Rs10 coin to replace the existing Rs10 banknote. The design change is a longer-term project rather than an immediate currency swap, but it signals that the government is preparing a refresh of the country's banknotes alongside its fiscal and governance decisions.
What happens next will depend on implementation rather than announcement. The Kuwait pact now moves from ratification to the practical work of joint training and exchanges, the KP governor's monthly reports will provide the first public test of how emergency powers are being used, and the LPG auction system will be judged by whether it brings cylinder prices back towards official rates before winter demand peaks. Each of those tests will unfold over the coming weeks, and each will show whether Wednesday's cabinet decisions change conditions on the ground or remain, for now, on paper.
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