Experts at a Sustainable Development Policy Institute webinar warned that rising energy costs are putting Pakistan’s industrial sector under severe pressure and urged a gradual shift from gas to electricity and renewable energy to protect long-term competitiveness.
The event, titled “Rising Energy Costs and the Future of Sustainable Industry in Pakistan”, featured cost projections and policy analysis. Dr Sajid Amin Javed outlined three possible oil price trajectories, noting a 50% chance prices could hit USD 130–150 per barrel in the near term, a 10–20% chance that high prices persist for six to eight months, and a 30–40% likelihood of stabilization around USD 110–120, with USD 110 as a plausible average.
Dr Javed warned that such oil scenarios could translate into roughly 10–12% inflation for Pakistan, an increase in the import bill of about USD 6 billion, and a slowdown in GDP growth to an estimated 2.5–2.8%. He added that prolonged LNG disruptions, given dependence on Qatari supply, would further squeeze energy-intensive industries.
Engr. Ubaid ur Rehman Zia described three waves of impact on industry: an initial structural sickness as rising energy costs and IMF-mandated reforms disrupted self-generation and shifted energy toward non-productive uses; a so-called “relief that wasn’t” when a February 2026 tariff cut of nearly Rs 4 per unit was largely offset by a Fuel Charges Adjustment of Rs 1.78 and compounded by a Rs 1,243 per MMBtu levy on off-grid captive power—measures that prompted formal protests from textile exporters; and an ongoing geopolitical shockwave marked by WTI crude swings from about USD 75 to USD 110 per barrel before settling around USD 84–90, signaling persistent structural uncertainty. He called for urgent policy reform, industrial electrification, and accelerated renewable adoption.
Ms Saleha Qureshi observed that LNG prices have surged to USD 15.77 per MMBtu while Pakistan imports roughly 80 percent of its liquid fuels and nearly 20 percent of its power mix, increasing systemic vulnerability. She noted that a recent petrol hike of around Rs 55 per litre has already pushed logistics costs up by about 12 percent, creating a “triple shock” for manufacturers from electricity tariffs, gas prices, and feedstock costs.
Syed Mohammed Osama Rizvi argued that the country’s refining configuration is misaligned with market demand, with many refineries still using hydro-skimming technology that yields furnace oil rather than high-demand fuels like high-speed diesel, leaving Pakistan reliant on imports for some 40–45 percent of refined products.
Sheikh Mohammed Iqbal, former CEO of the Pakistan Textile Council, warned that rising energy costs together with taxes are eroding competitiveness against regional peers such as Bangladesh and Sri Lanka. He urged that electricity become both cheaper and more predictable through tariff rationalization, reduced inefficiencies, grid upgrades for reliability, and faster deployment of renewables, energy storage and EV infrastructure to lower long-term costs, protect jobs and strengthen industrial and transport sector competitiveness.
Muhammad Abdul Rafay from Alternate Law Collective said industries cannot be forced to choose between an unreliable grid and costly captive power. He stressed the need for long-term planning, a flexible and investable grid, transparent pricing and market rules that enable efficient load management and renewable integration. Rafay also pointed to misalignment between national electricity reforms and the IMF Extended Fund Facility as a source of investor uncertainty for long-term transition decisions.
Manzoor Ahmed Alizai of PRIED proposed a two-track approach: rationalize industrial tariffs while integrating renewable energy, ensuring the grid is strengthened and market rules allow reliable access to competitively priced electricity. He emphasized robust demand forecasting, clear electrification targets and credible planning so generation, transmission and grid flexibility investments are made ahead of demand rather than reactively.
Speakers converged on the need for coordinated policy action and investment to enable industrial electrification and renewable deployment, arguing that addressing rising energy costs through tariff and grid reforms, cleaner fuel mixes and predictable pricing is essential to safeguard Pakistan’s industrial future.
