The new government faces the daunting challenge of navigating its complex economic landscape. The country’s foreign debt, while seemingly modest at US$124.5 billion or 42 percent of its GDP as reported by the State Bank of Pakistan in mid-2023, belies an undercurrent of fiscal strain.

The crux of the dilemma lies in the country’s foreign exchange earnings, which fall short of bridging the gap between export revenue and import costs. The previous fiscal year saw a current account deficit of US$30.5 billion, a gap only narrowly closed by the remittances from the Pakistani diaspora and further borrowing on the international front.

On the domestic front, internal economic challenges have thwarted efforts to boost export earnings in 2024. The textile industry, a cornerstone of Pakistan’s exports, has been particularly hit, with surging electricity costs leading to widespread mills closures and a dip in export production throughout 2023. Regulatory measures aimed at stabilising the currency have had the unintended consequence of dissuading overseas Pakistanis from utilizing official remittance channels.

In the face of static export earnings, the government’s most pressing priority is to catalyze exports through economic stability and growth. This is where the country’s energy consumption patterns emerge as both a challenge and an opportunity.

The sectors of industry, transport, and residential living have experienced notable shifts in their energy demands over the past two decades.

A discernible rise in energy consumption within residential areas, a sector that traditionally does not feed directly into economic productivity, calls for a strategic reallocation of energy resources. The following graph illustrates the need for an energy paradigm shift towards sectors that promise to revitalize the national economy.

The confluence of findings from academic literature on global energy consumption offers a robust framework for Pakistan’s energy policy.

The examination of OECD countries’ energy use illustrates the impact of economic activities on energy demands and........

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