LAHORE: Escalating geopolitical tensions in the Middle East have once again exposed the fragility of Pakistan’s fuel-dependent economy, prompting experts and industry leaders to call for an accelerated transition towards clean and sustainable energy.
Concerns have intensified as tensions threaten the strategically vital Strait of Hormuz, a key artery for global oil supplies. Analysts warn that Pakistan’s heavy reliance on imported petroleum is increasingly unsustainable in the face of recurring global shocks.
The ongoing crisis has already triggered a ripple effect domestically, with rising fuel prices fueling inflationary pressures and increasing the cost of transportation and essential goods. Beyond this, there are growing concerns about the potential impact on remittance inflows.
Dr. Khaqan Najeeb highlighted that nearly 55% of Pakistan’s remittances—around $22 billion—originate from Gulf countries, making the economy vulnerable to prolonged regional instability.
“We are in this situation because of a lack of long-term planning,” he said, noting that recent fuel price hikes aimed at curbing demand have instead driven up transport and food costs without significantly reducing consumption.
To address immediate pressures, experts have pointed to recommendations from the International Energy Agency, including behavioural measures such as remote working, carpooling, and efficient driving practices. However, they emphasize the need to replace blanket subsidies with targeted support for vulnerable segments.
The transport sector remains at the core of the challenge, consuming nearly 80% of Pakistan’s petroleum products. According to Danish Khaliq, this reflects a structural dependence on fossil fuels that persists even during economic downturns.
He stressed that transitioning to New Energy Vehicles (NEVs) could help decouple the transport sector from volatile global oil markets by shifting demand toward locally generated renewable electricity.
“Electrifying transportation using domestic renewable resources can significantly enhance energy security and reduce exposure to global price shocks,” he noted, adding that consistent policy frameworks and long-term investment incentives are essential for a successful transition.
At the provincial level, the Punjab government has already initiated measures to promote electric mobility, including interest-free loans for e-taxis, mandatory EV charging infrastructure at new petrol stations, and the gradual replacement of fuel-based public transport fleets with electric buses.
Efforts are also underway to attract international investment in EV assembly plants within Special Economic Zones (SEZs), further supporting the transition toward a low-carbon transport ecosystem.
Dr. Najeeb underscored the importance of scaling up these initiatives, particularly in public transport systems, and pointed to China as a successful example of large-scale electric vehicle adoption.
Experts agree that while short-term fuel price management may offer temporary relief, long-term economic resilience will depend on structural reforms—especially the expansion of renewable energy and the electrification of transport—to reduce Pakistan’s dependence on imported fuels.
Story by Jawwad Rizvi
