ISLAMABAD: The government has outlined a series of measures in the Annual Plan 2026-27 aimed at strengthening energy security, expanding strategic fuel reserves, and accelerating the transition toward sustainable power generation.
A key policy shift includes the expansion of strategic petroleum reserves, as Pakistan seeks to reduce vulnerability to global supply disruptions. Currently, the country maintains commercial fuel stocks equivalent to around 20 days of demand, but the government plans to increase this buffer to 30–45 days of consumption.
Officials noted that in contrast to regional economies such as India, which maintain larger strategic fuel reserves, Pakistan has made limited progress in building long-term oil storage capacity. The government has also extended an invitation to oil-producing countries, particularly in the Middle East, to invest in strategic storage facilities in Pakistan, offering incentives for participation.
Refining and Fuel Quality Upgradation
The plan also prioritises the upgradation of local oil refineries to enable production of cleaner fuels, including Euro-V standard petroleum products, as part of efforts to improve environmental compliance and reduce emissions.
In addition, the government aims to shift fuel transportation from road-based logistics to a more efficient pipeline and storage network, while expanding terminal capacity to enhance supply chain resilience.
Major Power Infrastructure Expansion
Under the sustainable energy framework, the government will develop a 500kV transmission corridor from Ghazi Barotha to Faisalabad, designed to strengthen national grid capacity and reduce transmission bottlenecks.
The corridor is expected to transmit up to 2,300 megawatts of electricity, while an additional 1,820 megawatts of clean energy capacity will be integrated into the national grid.
Modern grid technologies, including Battery Energy Storage Systems (BESS) and STATCOM devices, will also be deployed to improve stability, efficiency, and renewable energy integration.
Renewable Energy Expansion Targets
The power sector has been allocated Rs151.259 billion under the PSDP 2026-27, with a clear focus on increasing the share of renewables in the energy mix to 30 percent by 2030.
To achieve this target, the government plans to add 3,787 megawatts of clean electricity generation capacity to the national grid over the coming years.
Officials said public investment will be aligned with private sector participation, particularly in refining, LNG infrastructure, and energy storage systems, to support a more data-driven and diversified energy ecosystem.
Water Sector Investments Linked to Energy Security
The development strategy also includes 34 major water infrastructure projects worth Rs1.848 trillion, with Rs97.354 billion allocated in FY2025-26, while the FY2026-27 PSDP provides Rs74.920 billion for water resource development.
Authorities say the integrated approach between water and energy planning is aimed at ensuring long-term sustainability, improved resource efficiency, and enhanced resilience against climate and supply shocks.
