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The energy sector in Pakistan is experiencing a consumer-driven change as the nation transitions from temporary solutions to a more permanent shift away from fossil fuels toward renewable sources. Non-fossil energy supplies, such as hydroelectric, nuclear, and solar power, have increased by almost 50 percent since FY21, while fossil fuel-based energy sources have kept decreasing.

Following years of dependence on imported and local fossil fuels, Pakistan is now turning to more economical and environmentally friendly alternatives. According to the Pakistan Energy Market Review (PEMR) 2025, in FY24, reduced energy supplies, falling consumption, and increasing fuel prices are prompting a slow transition away from fossil fuel reliance. The Pakistan Energy Market Review (PEMR) 2025, published by Renewables First, indicates that Pakistan’s primary energy supplies fell for the second year in a row during FY24, while final energy consumption decreased significantly due to financial limitations and weaker demand from industry and agriculture.

Crude oil production has decreased by 25% in the last ten years, while local gas output keeps falling, leading to greater dependence on costly imported LNG. Coal usage is also decreasing, with most of the remaining demand now sourced from domestic coal rather than imports. Likewise, it was mentioned that LNG imports are putting pressure on foreign reserves as industries shift away from them because of high expenses. These imports are now being directed towards homes, contributing to already high electricity bills. Long-term LNG agreements have resulted in an excess at a time when industrial and captive consumption is decreasing. Combined with the rupee’s fluctuation against the dollar, these elements are creating strain on the energy system. Gas-sector circular debt has reached Rs 3.2 trillion by March 2025, underlining the critical need for reforms throughout the gas supply chain. Solar power is reducing fossil fuel use as Pakistan’s energy market experiences a consumer-driven transformation. The share of coal in the energy mix is decreasing mainly due to market forces, as increasing costs make it less competitive.

This report emphasized that the shift spans various industries. The manufacturing sector has experienced the most significant reduction in fossil fuel usage, with industrial energy consumption decreasing by 21% compared to the previous year in FY24. Electric vehicle incentives are encouraging the transportation industry to move towards electrification, while farmers are opting for solar-powered tube wells to reduce dependence on diesel and the power grid.

These changes highlight an energy system in transition, where solar power is emerging as the cornerstone for future development. Since 2017, Pakistan has imported more than 50 GW of solar PV, allowing homes, farms, and businesses to cut expenses and enhance reliability. Although this shift offers significant benefits, the report emphasized that it also demands strong measures. Reforms in the gas and electricity sectors, such as adjusting tariffs, enhancing distribution efficiency, and providing open-market access, are essential to manage circular debt, while policies should ensure that solar energy remains affordable and fair for all users. As solar adoption increases, Pakistan’s energy scene is moving into a new era, shaped by its people and characterized by resilience and reform, according to the report.

Provided by SyndiGate Media Inc. (Syndigate.info).