Page 24 - CMA Journal (Mar-Apr 2026)

systems were adopted throughout the country.
This spurred a revolution as solar systems were not
only installed by richer households facing
increasing costs of unsubsidized electricity but also
by the poorest households which were not
connected by the grid. Farmers were provided with
low-cost electricity to run their pumps, which were
previously run by high-cost diesel. Further,
underserved areas with limited access to electricity
were able to bene t from electricity generated by
the solar panels.
Apart from the bene ts of the solar revolution,
another opportunity is emerging for Pakistan due
policymakers. However, with headwinds increasing as oil to the regional con icts. Pakistan witnessed a
prices rise, imports of oil products are likely to become more surge in transshipment since the start of the war as the
expensive, particularly those that are more scarcely available blockade in the Strait of Hormuz reduced shipping traffic
in the market. According to a recent study by the Pakistan from the ports in the Persian Gulf, diverting several of them
Institute of Development Economics, a $10 increase in the towards Karachi Port, Port Qasim and Gwadar. The shipping
price of oil can increase the import bill of Pakistan up to $2 lines are rerouting their routes to Pakistan in order to avoid
billion, while a three-month closure of the Strait of Hormuz risk premiums and bottlenecks in the Persian Gulf. Pakistan
driving the oil prices up to $150, can lead to a monthly oil reported a historic increase in cargo handling in the rst
import bill of $4.5 billion. Further in ation would increase quarter of 2026. Karachi port handled a total of 8300
from 7 percent in February 2026 to 15 percent by the end of transshipment containers in 2025. This was surpassed in a
the scal year. The prices at the petrol pumps have already 24-day window in March 2026 as Pakistan reported an
witnessed substantial increases, which will contribute increase of 1400 percent in transshipment. The number
towards increasing logistics and transportation costs. With surpassed 11,000 in the month of March 2026. Port Qasim
diesel powering not only energy but also transportation and handled 900 containers in a single day, with more than 4,000
agriculture sectors, rising oil prices have a spiraling effect on TEUs in a single month. There is a surge in traffic into Gwadar
the economy. This will be exacerbated by increasing risks of Port as well, reviving the possibilities of converting it into a
shortage as the government may need to divert the limited regional hub as proposed under CPEC. The government has
supply of fuel towards more essential sectors and services, signi cantly slashed port transport charges and allowed
creating a mounting challenge as stakeholders face terminals located away from ports to handle transshipment
rationing of fuel supplies. The increased loadshedding is a cargo. This will encourage larger ships to berth at Pakistani
major step towards such rationing. ports, while smaller ships with lower insurance risk premium
to commute between Pakistan and the ports in the Persian
Fuel products constitute approximately a quarter of total Gulf. The development of transportation and logistics
imports of merchandise into Pakistan according to the World facilities in Pakistan will likely provide newer opportunities
Bank's World Development Indicators. This share is likely to for Pakistan to become a regional hub as planned under
increase with the rise in fuel prices. Not only is Pakistan's
CPEC.
energy needs ful lled via imported fuel products, majority of
the imports of such products transit through the Strait of Therefore, several opportunities are emerging alongside the
Hormuz. Therefore, it is imperative for Pakistan to undertake rising challenges. It is up to the policymakers and the
policy reforms that reduce the dependency on oil imports. government to ensure that these opportunities are
The solar revolution in Pakistan that changed the dynamics channeled better to improve the welfare of the citizens while
of the power sector is an example of such forward-looking dampening the constraints and pressure on the economy
policies that reduce the dependency on imported oil. due to the mounting challenges.
Increasing availability of renewable energy options such as
solar and wind have provided opportunities for countries About the Author: Dr. Aadil Nakhoda is a Faculty Member and
dependent upon imported fuel products to invest in Assistant Professor at the Institute of Business Administration (IBA),
indigenous sources of renewable energy. Such investments Karachi, where he also serves as Chair of the Economic Advisory
not only lower the possibility of a balance-of-payment crisis Group (EAG) and Research Fellow at CBER. Previously, he was a Part-
time Faculty at Karachi Institute of Technology & Entrepreneurship
driven by rising fuel prices but also reduce the impact on the
economy from regional con icts. According to the World and a Research Fellow at the State Bank of Pakistan. He has also
served as a Research Assistant in Learning & Experimental
Resources Institute, Pakistan imported more than 17GW of Economics at the University of California, Santa Cruz, a Teaching
solar photovoltaic panels in 2024, while cumulative solar Assistant for Development Economics at The Pennsylvania State
panel imports between 2019 and 2025 surpassed the total University, and a Supplemental Instruction Leader for Principles of
installed capacity in Pakistan. Tax incentives and duty Microeconomics.
waivers made solar adoption affordable, as rooftop solar

22 ICMA’s Chartered Management Accountant, Mar-Apr 2026