Sajjad Azhar
The Strait of Hormuz has once again emerged as a critical artery of the global economy, with rising tensions pushing oil prices to nearly double their previous levels. Since the onset of the crisis, energy markets have experienced unprecedented volatility, sending shockwaves across importing nations—particularly Pakistan.
Prime Minister Shehbaz Sharif recently informed the federal cabinet that Pakistan’s oil import bill has surged dramatically due to soaring global prices. Weekly imports, which previously stood at around $300 million, have now climbed to nearly $800 million. This has pushed the monthly energy import cost from $1.2 billion to approximately $3.2 billion.
Experts warn that if the crisis persists, Pakistan could face an additional burden of nearly $2 billion per month, placing further strain on an already fragile economy.
The Strait of Hormuz is responsible for nearly 25% of global oil shipments and around 30% of LNG trade, making it one of the most strategic and vulnerable chokepoints in the world. Before the crisis, around 100 oil and gas tankers passed through daily; that number has reportedly dropped to nearly a tenth, disrupting supply chains globally.
Analysts suggest that the current energy disruption is more severe than the oil shocks of the 1970s, when global supply fell by only around 5%. The present decline is significantly higher, sending global economies into uncertainty.
Pakistan, already among the vulnerable economies, imports large volumes of energy from Gulf countries. It ranks among the top five importers of oil and third in LNG dependence. In response, authorities have introduced emergency energy conservation measures, including early closure of markets at 8 PM and partial work-from-home policies for several days a week. Further restrictions may be imposed if the crisis deepens.
Solar Revolution: A Silent Energy Shift in Pakistan
While the global energy crisis intensifies, Pakistan is witnessing an unexpected transformation in its energy landscape—driven not by government planning but by market forces.
A recent report by Renewable First and the Karachi School of Business and Leadership (KSBL) revealed that Pakistan imported nearly $18 billion worth of solar panels over the past five years, with a total installed capacity of around 50 gigawatts.
Unlike state-driven energy transitions, this solar boom has been largely organic. As electricity prices soared beyond consumer affordability, households and businesses independently shifted towards solar energy. Government support through net metering policies and duty exemptions further accelerated adoption.
From just 1 gigawatt in 2018, solar imports have surged to over 51 gigawatts annually by 2026, marking one of the fastest solar transitions globally. Analysts say Pakistan has achieved a level of solar penetration unmatched by many developed economies in such a short span.
$12 Billion Saved in Energy Imports
The shift towards renewable energy has already begun reshaping Pakistan’s import bill. Between 2022 and 2024, oil and LNG imports fell by nearly 40%, as dependence on furnace oil and gas-fired power generation declined.
According to energy researcher Rabia Babar of Renewable First, Pakistan has already saved more than $12 billion in foreign exchange due to the solar transition. If current trends continue, an additional $6.3 billion in savings is expected by the end of this year.
This rapid transformation has also left Pakistan with surplus LNG import contracts, prompting authorities to explore global resale options and renegotiate agreements.
A Turning Point in Energy Strategy
While neighbouring economies such as China, India, and South Korea continue increasing LNG imports, Pakistan has taken a different trajectory—reducing reliance on fossil fuels through rapid solar adoption.
The government now aims to meet 60% of its energy demand from renewable sources within the next four years, reducing dependence on imported oil and shielding the economy from global shocks.
Experts argue that without this solar revolution, Pakistan’s current energy crisis would have been far more severe, potentially deepening load-shedding and economic instability.
As global energy markets remain uncertain, Pakistan’s evolving energy mix may offer a rare case study in how crisis-driven adaptation can reshape a country’s long-term economic resilience.
