Page 41 - CMA Journal (Mar-Apr 2026)

Pakistan's economy is largely dependent on the global energy a n d d e v e l o p i n g
market, particularly in terms of developments in the rest of the r e n e w a b l e e n e r g y
world. Recently, Middle East con icts have disrupted the supply resources such as solar
of oil and lique ed natural gas (LNG), which has created and wind power. Besides
signi cant challenges for countries like Pakistan, heavily upgrading the energy
dependent on imported energy. Pakistan's biggest challenge is infrastructure, including
its dependence on imported oil and LNG. Therefore, any storage capacities and
disruption in the supply chain results in serious repercussions transport systems, the
for Pakistan's economy. government should also
Compounding the situation, domestic fuel prices in Pakistan focus on the energy
have been rising while the government faces signi cant sector with a view to
pressure in managing the economy. One of the key factors making it efficient and
exposing Pakistan to global energy supply uctuations is its productive.
dependence on the Strait of Hormuz. It is a critical sea passage Long-Term Energy Syed Immad Uddin Hussaini
for shipment of oil and LNG; interruptions of this route could Research Associate at the
signi cantly affect Pakistan's energy supply. Notably, 20% and Planning and Reform Ministry of Commerce,
25% of the world's LNG and oil respectively are shipped through One of the key measures
the Strait of Hormuz, making it a critical chokepoint for the Pakistan can take is to Government of Pakistan
global energy market. diversify its energy
Regional Pressures and Policy Response sources. This entails reducing the country's dependence on
major suppliers such as Qatar and the UAE, and tapping into
Pakistan's economy is also affected by developments in various new sources of energy. Besides, the government may
countries of the region. For instance, India and Bangladesh have incentivize the development of domestic energy sources such
been affected by the con icts in the Middle East as well. This has as hydropower and coal. Additionally, raising the energy
prompted these two countries to manage their energy supplies efficiency level of the country is a signi cant measure. This
more effectively. could be achieved by investing in energy-saving technologies
Pakistan's government has taken measures to counter the and promoting behavioral change to reduce energy
energy crisis, including levying a tax on luxury fuels and limiting consumption. Besides, the government can strengthen its
advocacy for public transport and make the use of fuel-efficient
the amount of fuel that government officials are allowed to use.
vehicles attractive to the masses. Obviously, the energy crisis in
In addition, the government has urged people to use public
transportation and save energy. Pakistan is one of those issues that can only be resolved with a
long-term plan.
Nevertheless, despite such measures, Pakistan's energy crisis
The government must devise a holistic approach to energy
remains a challenge. In fact, the country's petrol prices have supply management with a focus on investing in renewable
been on the rise for years and this has been a major source of
energy, broadening the spectrum of energy sources, and
economic pressure. More speci cally, petrol prices in Pakistan
improving energy efficiency. By reducing its imports of oil and
have risen from around PKR 28 per litre in 2000 to over PKR 300 LNG, Pakistan would be able to establish a sustainable energy
per litre at present.
system for the future. Pakistan's economy will always be
Impact of Rising Petrol Prices susceptible to global developments, particularly in terms of
energy. With a long-term plan in place for its energy supply
The primary cause of this rise is Pakistan's dependence on management, the country would be in a better position to cope
imported oil; when global oil prices increase, it leads to with external shocks and would also be able to chart a path to a
signi cant economic challenges for the country. Although the more stable and sustainable economy.
government has come up with some measures like imposition The key to Pakistan's future lies in managing its energy supply in
of taxes and cuts in fuel consumption to cope with these a sustainable and secure manner. This will require a lot of effort
problems, the issue remains signi cant. and investment. This is essential for the country's long-term
Pakistan should adopt a sustainable perspective on the energy prosperity. Pakistan needs to think about its energy strategy and
supply issue if it is to overcome these difficulties. This can be ensure that it is taking every possible step to reduce its reliance
achieved by reducing dependency on imported oil and LNG on imported oil and LNG.
ICMA’s Chartered Management Accountant, Mar-Apr 2026 39