Page 32 - CMA Journal (Mar-Apr 2026)

Moreover, higher energy costs raise businesses' production crude and processing locally is a lower drain on foreign
costs and reduce consumer purchasing power for other reserves than importing re ned products.
goods and services; both channels suppress economic Maintaining not only commercial stocks but also SPR is
activity. Notably, household disposable income has already critical. Furthermore, diversifying energy markets beyond
been declining, as HIES data across years show, due to past the Gulf countries, including Iran and Russia, has now
energy cost increases; this current shock will further worsen become essential.
the situation (Malik, 2026).
It is time to rethink Pakistan's transport policy – switching to
Way Forward rail for cargo can save fuel, cut spending on imported oil,
lower transportation costs, and reduce greenhouse gas
Pakistan should focus on reforms that encourage growth, as emissions.
this is the best way forward. The focus should be on building
Finally, a sustainable solution lies in improving scal policy to
foreign reserves through investment-led and export-led reduce reliance on fuel-based taxes, establishing a
growth. transparent, market-based framework for fuel pricing that
Pakistan needs growth, to be achieved through structural re ects global oil prices, and providing targeted budgetary
transformation rather than increased resource support for vulnerable groups rather than blanket subsidies.
consumption. Energy use efficiency, diversi cation of References
energy sources, and development of technological
n Farooq, S. (2026). Gulf Instability and remittances' risk,
alternatives are essential to reduce future vulnerabilities.
Pakistan's transportation and industrial sectors are energy- DAWN, March 30, 2026.
inefficient; fuel-efficient vehicles and energy-saving n Malik, A. (2026). Pakistan's Next Economic Test, The
technologies can signi cantly reduce fuel demand. News, March 16, 2026.
Electri cation is often suggested, but without n Malik, A. (2025). Untangling the gas sector, DAWN,
indigenization of technology, it cannot be done cost- January 06, 2025.
effectively. n PBS (2026). Pakistan Bureau of Statistics,
https://www.pbs.gov.pk/.
Pakistan must accelerate its transition to low-carbon energy
n FD (2026). Finance Division,
to help cut emissions, increase resilience, and achieve energy https://www. nance.gov.pk/.
independence. Expanding solar alone will help only a few.
n SBP (2026). https://easydata.sbp.org.pk.
For its broader impact on energy and economic security, it
must be integrated into the grid. Therefore, grid upgrades, n Trading Economics (2026).
development of utility-scale storage capacity, and https://tradingeconomics.com.
indigenization of solar technology are essential.
Note: The data that is not cited within the text is from Pakistan Energy Yearbook,
Tariff design adjustments can also help share solar bene ts 2024-25.
across a larger population. Similarly, such adjustments in the
gas sector can help in the better utilization of scarce About the Author: Ms. A a Malik is a researcher and an
resources. Market-based tariffs in the upstream sector can energy expert with more than thirty years of experience at the
also encourage exploration activities. Pakistan Institute of Development Economics (PIDE),
Upgrading Pakistani re neries has now become Islamabad.
unavoidable to reduce future economic risks. Importing

Figure 5: GDP Growth (%) and Energy Imports (%)

Data Source: WDI, SBP, and Pakistan Energy Yearbook

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