Rising Oil Prices and Pakistan’s Staggering Economy
When Prime Minister Shehbaz Sharif recently informed the nation that Pakistan’s daily energy import bill has reached approximately $600 million, it was nothing short of a warning siren. If this figure is projected annually, the country could be forced to spend around $41 billion merely on importing oil, gas, and other energy products. For a nation already staggering under the weight of mounting debt, shrinking exports, and dangerously low foreign exchange reserves, this sum is crippling. The surge in global oil and LNG prices is no longer just an economic challenge; it is rapidly morphing into a threat to national security and internal stability.
Pakistan’s economy has been under relentless strain for several years. Foreign exchange reserves had plummeted to precarious levels, and at one point, international observers widely feared that Pakistan might default on its external obligations. The ballooning energy import bill has consistently been the largest driver of the trade deficit. By 2021 and beyond, the situation had deteriorated so severely that Pakistan had to seek financial lifelines from Saudi Arabia, the UAE, and China, while also securing a stringent bailout package from the International Monetary Fund. Without this external support, the crisis could have spiraled far worse.
In the aftermath, the government attempted to curb imports and enforce tough measures to narrow the trade and current account deficits. Yet the truth remains that the economy never fully returned to safe ground. The peril has persisted. Unfortunately, our policy framework has often equated mere survival, avoiding outright default, with success, while the far more urgent task of tackling root causes has been sidelined. Structural reforms in the energy sector, utilisation of indigenous resources, modernisation of the power grid, and resolution of the crippling circular debt should have been addressed on a war footing. They were not. As a result, the moment the world tilts toward a fresh crisis, Pakistan is once again seen standing at the same fragile precipice.
Pakistan has never been short of potential solutions, had they been timely harnessed. Solar energy projects could have been scaled up massively. The vast coal reserves of Thar could have been tapped more efficiently through advanced technologies. Hydropower projects could have been fast-tracked. The contentious issues surrounding private power purchase agreements could have been resolved in the national interest rather than through political expediency. But a chronic lack of policy continuity, bureaucratic inertia, and the absence of long-term vision have steered the country back to square one, where every global shock hits Pakistan like an economic earthquake.
Today, the need is not for stopgap measures but for a comprehensive, cohesive national energy strategy. The government must immediately tighten controls on non-essential imports, launch a nationwide energy conservation campaign, enforce austerity in public institutions, and give absolute priority to local energy resources. Cities need widespread adoption of solar power, homes and industries must transition to alternative energy, and public transport systems require urgent overhaul. At the same time, deep-rooted ills, including power theft, inefficient distribution networks, and the circular debt trap, demand tough, decisive action. Further delay will not merely stoke inflation; it will place industry, employment, the value of the rupee, and the common citizen’s livelihood under intolerable strain.
The stark reality is that Pakistan can no longer afford to stumble from one crisis to another, relying every few years on friendly nations or multilateral lenders to pull it out of the abyss. The world is changing rapidly, and even major powers are increasingly preoccupied with their own internal challenges. In such a climate, Pakistan must stand on its own feet for its very survival. Energy self-reliance is no longer just an economic imperative; it is fast becoming a question of national existence.
