We no longer have the luxury to exist in an isolated ecosystem where we can pre-determine the effect of international events on our policies and strategies. It has, instead become a live biosphere where regional collaborations and active war zones have significant potential to influence and change global dynamics. The Russia-Ukraine conflict that escalated in 2021 has had a significant economic impact, driving commodity prices, particularly fuel, to record highs. This impact has been especially severe in Pakistan, where a financial crisis led to an almost 80% devaluation of the PKR, above 30% inflation, and a doubling of energy prices.

Political instability, increased smuggling from Iran, and security issues in Afghanistan have further exacerbated the situation for consumers.

Pakistan’s heavy reliance on imported energy has highlighted multiple challenges, including limited domestic resources, and an expensive fuel mix for power generation. Additionally, power generation and distribution have not kept pace with economic growth, leading to a significant energy shortfall.

This insufficiency and high energy costs have constrained economic growth and employment opportunities.

The crisis has been further aggravated by skyrocketing circular debt and reliance on fossil fuels, especially oil and natural gas, which generate 80% of its energy. The single-buyer model through the Central Power Purchasing Authority Guarantee Limited (CPPA-G) hampers competition and strategic planning, leading to inefficiencies. As a result, Pakistan’s power tariffs are significantly higher than its peers, undermining regional competitiveness and export potential. The sector’s critical state threatens the entire economy, necessitating urgent reforms to ensure sustainable and efficient energy management. The discussion around the challenges of energy sector has gained strength in the wake of inflation, and widening gap between production and supply, creating a huge space for resolute deliberations.

The recently concluded Pakistan Energy Symposium in Islamabad, organized by the Overseas Investors Chamber of Commerce and Industry (OICCI) and Shell Pakistan Limited, provided just that opportunity, by not only bringing together stakeholders and thought leaders to discuss the causes and solutions to Pakistan’s energy........

© Business Recorder