Pakistan’s Energy Crisis: A Looming Threat To Development – OpEd
Energy serves as the backbone of all production and consumption, making it indispensable for the economic growth of any country. In Pakistan’s case, however, the nation is inching closer to an energy catastrophe. The rising costs of global energy, coupled with the sharp depreciation of the Pakistani rupee and domestic political instability, are pushing the country towards a severe energy crisis. This convergence of factors is not only threatening Pakistan’s ability to meet its growing energy needs but also jeopardizing its economic progress.
Pakistan is not alone in facing an energy shortage. Many nations are grappling with this issue, particularly as energy markets experience shocks across Europe and Asia. But Pakistan’s crisis is compounded by its over-reliance on imported energy. The country’s energy production is insufficient to keep up with domestic demand, which leaves it vulnerable to fluctuations in global prices. The economic impact has been staggering; some estimates suggest that energy shortages have cost Pakistan up to 4% of its GDP in recent years. The ripple effect has led to the closure of factories, slowed production, and exacerbated unemployment, further weakening the nation’s already fragile economy.
The origins of Pakistan’s energy troubles trace back several decades. In the 1970s, the construction of the Mangla and Tarbela dams enabled the country to generate sufficient hydroelectric power to meet its needs, staving off an energy crisis at the time. However, by the 1980s, as the economy expanded rapidly, energy consumption outpaced infrastructure growth. Despite some efforts to expand energy capacity, Pakistan’s population boom and accelerated urbanization continued to outstrip supply. Today, the country’s energy woes are more than just a problem of production, they reflect deep-rooted systemic issues.
Pakistan has significant domestic energy resources, including coal, natural gas, and hydropower, yet these remain underutilized. Oil and gas are particularly problematic, consumption has been so high that domestic reserves are rapidly dwindling. According to the Oil and Gas Development Company Limited (OGDCL), Pakistan’s gas reserves may be depleted by 2030, and oil by 2025. Climate change also poses a serious threat to hydropower generation, as changing weather patterns disrupt water availability for hydroelectric plants. The looming depletion of these resources paints a grim picture of Pakistan’s energy future.
Governance inefficiencies exacerbate the crisis. Multiple government ministries are responsible for overseeing energy policies, yet coordination between them is sorely lacking. The absence of clear authority, combined with turf wars and bureaucratic inertia, has led to gross inefficiencies in the sector. Transmission and distribution losses are alarmingly high, and the country’s power grid is notorious for its poor performance. The sight of people attempting to tap into power lines to secure electricity is a common, and troubling, illustration of how desperate the situation has become.
The financial challenges facing Pakistan’s energy sector are equally dire. The national economy is struggling, liquidity is low, and capital for investment in energy infrastructure is scarce. Private energy producers, transmission companies, distribution agencies, and even the government itself are finding it increasingly difficult to pay for the energy they need. According to figures from Pakistan’s power ministry, influential defaulters owe over $1 billion in unpaid bills, further straining the system. This “circular debt”, the shortfall between revenues and the costs of energy production, transmission, and distribution has paralyzed the sector and continues to drag down the economy.
In an era where technological advances are driving automation and rapid production, energy security is critical. Pakistan cannot hope to keep pace with the rest of the world without reliable and affordable energy. To become a competitive and modern economy, the country must shift its focus toward renewable energy sources. Investing in solar, wind, and other renewable technologies is not only necessary for economic growth but is also crucial for Pakistan’s long-term sustainability. However, policy shifts alone are not enough. The political leadership and government agencies must unite in purpose, setting aside differences to prioritize energy reform and strategic investment.
Given the current global economic environment, Pakistan’s energy crisis is unlikely to resolve itself anytime soon. Nevertheless, the onus falls on the country’s leadership and stakeholders to confront the challenges head-on and develop long-term solutions. Optimism, though sometimes difficult in the face of such daunting problems, is essential. By taking small but meaningful actions within our own spheres of influence, we can collectively contribute to strengthening the nation.
The road ahead for Pakistan’s energy sector is undeniably difficult, but with the right policies, investments, and coordination, the country can overcome this crisis and chart a path toward sustainable development.
