pakistan energy sector

Written by Maryam Jilani 8:24 pm Articles, Current Affairs, Pakistan, Published Content

Exploring Pakistan’s Energy Sector: Sources and Trends

Similar to many developing nations, Pakistan has been experiencing a serious shortage of energy for almost 20 years. The nation’s meager domestic oil and gas reserves are running out quickly, while coal and alternative sources of energy are difficult to harness. Maryam Jilani gives a comprehensive overview of the regulators of the energy sector, the sources of energy production, as well as the patterns of energy consumption in Pakistan.
why submit to us?
About the Author(s)
+ posts
Ms Maryam Jilani is a student of Sociology who passionately believes in the advocacy of human rights and women empowerment.

Energy Situation of Pakistan

The isolated energy sector has stifled productivity and even forced the shutdown of companies in Pakistan, worsening unemployment. With a population of above 200 million and tremendous expansion in the past twenty years, Pakistan has a wealth of natural energy resources, but gross incompetence and a lack of appropriate governance have led to a catastrophic energy crisis. As a result, the nation uses only 452 kWh of power per person, which is about one-fourth of the average global usage.

In the lower regions of Pakistan, when summertime temperatures and humidity are extremely high, power outages last between 8 and 12 hours in urban areas and 12 to 18 hours in rural areas as a result of an increase in electrical consumption. To ensure that home and commercial consumers have access to natural gas throughout the winter, large-scale consumers—primarily power plants, industry, and the transportation sector—are restricted. This is because the demand for gas has grown more rapidly than the potential supply.

Pakistan fuel-wise installed capacity

The energy shortfall has caused hundreds of industries to close down or have their industrial output negatively impacted, lowering the standard of living for many households and having a significant adverse effect of almost 10% on the country’s GDP growth as a whole. Pakistan’s energy issue could become a threat to the country’s energy security if this energy shortfall is not rectified soon.

Participants in the Energy Sector of Pakistan

Periodically, the energy and electricity sector of Pakistan has undergone numerous stages of reorganization and reform. This industry’s reform started in the 1990s with the end goals of autonomy and privatization, but it is still undergoing numerous tribulations. The Ministry of Energy (MoE) currently oversees the energy sector of Pakistan, which primarily consists of two departments, the Petroleum and Power Divisions, each with appropriate functions and responsibilities.

The Pakistan Atomic Energy Commission (PAEC), the power sector watchdog NEPRA, several international corporations, as well as independent power producers (IPPs), are other important participants in the energy sector in addition to the Ministry of Energy. Nonetheless, the National Transmission and Dispatch Company handles all the work linked to electricity while the aforementioned entities only deal with energy and power management.

Sources of Energy Production: Analysing Imports and Exports


To satisfy the nation’s overall needs, Pakistan produces a very small percentage of its total oil output. The production of domestic oil is restricted by mechanical, budgetary, and technological limitations. This requires importing significant amounts of crude oil and other oil products to satisfy a sizeable portion of the overall demand.

The percentage of oil in the whole energy mix decreased from 34.4% in 2013–2014 to 25.7% in 2018–2019. According to the most recent figures, the cost of oil imports surged from July through April of FY2022 from US$8.69 billion to US$17.03 billion, a 95.9% rise.

Also Read:  Pakistan-Azerbaijan Relations: A Strategic Alliance

Oil is becoming more costly due to rising prices for international crude and the severe devaluation of the Pakistani rupee, which is putting pressure on the country’s external sector and worsening its trade imbalance. The jump in oil import tariff is related to value hikes as well as a rise in demand as the purchase of petroleum products increased by 121.15 percent in value and 24.18 percent in volume.

Moreover, in 2022, the value and quantity of imported crude oil increased by 75.34 and 1.4%, respectively. Furthermore, liquefied natural gas is similar it grew in value by 82.90 percent from July to April of FY2022, and its imports increased by 39.86 percent.

Natural Gas

The country’s scarce natural gas reserves are under extreme strain from the sharp rise in gas demand, which is rapidly depleting the reserves. The government of Pakistan is searching for both immediate and long-term solutions and strategies to efficiently address significant energy needs.

The government is concentrating on developing new exploratory wells to improve the supply of domestic gas in light of the increased demand for energy. Moreover, foreign LNG and piped gas are being utilized.

Approximately 373 million MMBTU of LNG gas, worth about US$3.4 billion, was purchased in FY2021 which represents about 30% of the nation’s total natural gas consumption, whereas 24.36 percent of gas was bought during the July–February period of FY2022 and 75.64 percent of gas was made domestically.


Pakistan also uses coal to produce electricity. The greatest coal reserves in the nation are in Thar, and they have recently undergone active development. In the initial quarter of FY2020, the 660 MW first Thar plant went into service. Presently, the total amount of coal-based electricity produced has surpassed 5280 MW.

Domestic coal contributes 1,320 MW to electricity production, while imported coal contributes 3,960 MW or over 75% of all coal-based electricity produced in the nation. The structure of energy generation relies mainly on imported coal, but when Thar field-based units are added to the mix, this tendency is likely to alter. Between July-Feb FY2022, the import of coal amounted to 12.21 million metric tonnes.

Hydroelectric Power

Pakistan has a huge potential for producing electricity from water and a wealth of hydropower. Its overall hydroelectric capacity is thought to be around 60,000 Megawatts; however, the nation is only utilizing roughly 16% of its potential, falling short of its potential overall. That is happening for a variety of causes, including the high investment costs related to the construction of hydro plants, the expansion of the electric traction network, and the need to relocate the affected people.

The electricity generation for hydropower is 10,251 MW at the moment or around 25% of the total installed capacity. Hydro and nuclear resources made up 10.7% of 2018-2019 all resources, down from 13.3% in 2013–2014.

Nuclear Technology

The utilization of nuclear technology to produce energy is growing steadily. Its power stations’ total installed capacity was 2,530 MW, and from July through March of FY2021, they provided the national grid with roughly 7,076 million units of electricity. In the period from July to March of FY2022, the net output of nuclear power plants grew by 39% to 3,530 MW, supplying 12,885 million units of electricity to the national grid.

There are six nuclear power plants (NPPs) currently operational on two sites around the nation. Two units each of the Chashma Nuclear Power Plants and the Karachi Nuclear Power Plants are included in the group of six NPPs.

Also Read:  Will Huawei Be Able to Hold Out Against the US's Sanctions?

The nuclear power reactors of Punjab, Mianwali, and Chashma had an average total output of 2,530 MW, which they used to generate roughly 7,076 million units of energy for the national grid between July 2018 and March 2020–21. The gross power of these nuclear power plants, which supplied 12,885 million kWh of energy to the national grid between July 1 and March 31, 2022, was 3530 MW.

Notwithstanding COVID-19 challenges, NPPs delivered uninterrupted and continual power at the greatest capacity factors during these challenging times. There are plans by Pakistan Atomic Energy Commission to build another nuclear power plant at Chashma, not far from Mianwali.

Wind  and Solar

Pakistan is rich in wind corridors, with potential for wind energy production; the country is thought to be capable of producing 50,000 Megawatts from the wind. Moreover, with 1,985 MW currently deployed, wind power already contributes 4.8 percent of the total installed capacity.

Furthermore, the prospects of solar power are very high. Although their capacity share is now tiny, it is anticipated to grow significantly, as evidenced by the Alternative and Renewable Energy Strategy 2019. About 1.4 percent of the installed capacity, or 600 MW, is made up of solar energy.

Evaluating the Contribution to the Energy Mix

Between the years 2013–2014 and 2018–2019, there was a significant variation in the proportion of various sources in the principal commercial energy supply. It is important to remember that the proportion of gas in the energy mix decreased from 46.3% in 2013–2014 to 35% in 2018–2019 along with the percentage decrease of oil in the whole energy mix (34.4% in 2013–2014 to 25.7% in 2018–2019).

In accordance with the percentages of a mix of energy sources used to generate electricity during the 2018–2019 period fossil fuels, hydropower, nuclear power, and renewable energy accounted for 67%, 21%, 8%, and 4% of this total, respectively. Hence, a trend could easily be traced from the years 2013-2014 and 2018-2019 where although nonrenewable sources form a substantial proportion, the presence of renewable sources was also not so little, along with the decrease in the portion of natural gas.

Pakistan electrcity generation

On the other hand, the proportional contribution of various sources in the production of electricity has not changed much from 2021 to 2022. Although thermal percentage contribution has decreased from 62.5 percent during July-April FY2021 to 60.9 percent during July-April FY2022, it still produces most of the nation’s electricity. Corresponding to this, hydel’s percentage share of energy generation decreased from 27.8% in July-April FY2021 to 23.7% in July-April FY2022.

In contrast, nuclear’s proportion climbed from 7.2 percent in the July-April fiscal year of 2021 to 12.35 percent in the July-April fiscal year of 2022. Furthermore, in the initial ten months of FY2022, the share of renewable energy in the generation of electricity climbed from 2.4% from July through April FY2021 to 3.02%.

Patterns of Energy Consumption

 In 2018–2019, the commercial, agricultural, and other sectors used about 3%, 2%, and 5% of the primary energy respectively, whereas the household sector used about 22% of energy production and the industrial sector used 37.11 of the total amount. Therefore it could be clearly deduced that the largest consumer was the industrial sector followed by the household arena.

There hasn’t been a significant shift in the trend of electricity usage over the first 10 months of 2022 and the year 2021. Household usage of electricity as a percentage of total consumption has somewhat decreased from 49.1% in FY2021 to 47.0% in FY2022. Moreover, consumption in the business world has decreased, falling from 7.4 percent in FY2021 to 7 percent in FY2022. Yet, from July to April of FY2021, the proportion of industry in power consumption climbed from 26.3 percent to 28 percent.

Also Read:  Pakistan in 2021: A Tumultuous Year

Electricity utilization in the agricultural sector has marginally increased from 8.9% to 9.0%. In other industries, such as public illumination and general services, power usage has reduced to 8% from 8.3%.

Correlation between Energy and Economy

The demand for main commercial energy is expected to rise at a pace of 4.3, 7.3, or 10.4% each year depending on the circumstances as the nation’s economy is expected to expand quickly. The government intends to close the energy supply-demand gap by taking into account a variety of alternative solutions. Yet, the fragile local security situation, technical issues, and difficulties with regard to earnings and operating measures, which are difficult in typical major projects requiring international contracts, have limited the possibilities for regional gas import.

Circular debt is another economic barrier that the nation faces. With the tireless efforts of several governments, this issue in the energy industry has mostly remained unregulated. By the end of 2020, the stated debt, which was PKR 450 billion in 2013, had grown to PKR 2.3 trillion, representing 5.6% of the nation’s total GDP.

The main causes of circular debt in Pakistan are:

  • the massive cost of electricity generation, which negatively affects the effectiveness of tax collection;
  • difficulties and delays in payment facilities;
  • high transmission losses, power theft, corruption, and revenue collection issues;
  • state subsidies; and
  • the heavy cash costs of government debt and high delayed penalties on payables.

Efficient power planning, taking into account the best distribution of sources of clean energy, and improved governance might essentially resolve Pakistan’s energy challenges. In the long run, this strategy might assist in reducing the cost of oil imports, limiting global warming, and ensuring energy security. Pakistan’s energy problem could become a danger to its security if it is not addressed in the near future on both an operational and strategic level.


Traditionally, the energy industry has been a bottleneck for Pakistan’s economic growth. Its energy needs are growing, and in the upcoming decades, there will be a significant increase in energy consumption. This level of energy demand will result in rising pressure on the energy supply and delivery systems. Without a thorough overhaul of the energy sector of Pakistan, this is unsustainable.

Due to the potential damage to our financial well-being posed by the kind of disruption we have seen, energy security is crucial. For there to be energy security, there’s a need of looking into alternative energy sources available in the nation. In this regard, Pakistan is actively pursuing a policy of switching from traditional energy sources to the use of homegrown environmental-friendly energy sources that are renewable and favorable to the environment.

In addition, indigenous and renewable resources must be explored more properly in order to examine future energy situations and integrate renewable energy into Pakistan’s energy mix. It is crucial that techniques for energy analysis, supply planning, and modeling are employed effectively. The nation’s current energy situation can only get worse if no plans are created and no effort is made to assist the adoption of renewable energy.

A strong return on investment and the adoption of renewable energy would attract foreign and domestic investors and create job opportunities. Therefore, to improve the economic conditions of Pakistan, the energy sector has to be error-free and sustainable as it acts as the powerhouse for all the other sectors of the country.

If you want to submit your articles, research papers, and book reviews, please check the Submissions page.

The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.

(Visited 2,189 times, 1 visits today)
Click to access the login or register cheese