Dependence on Imported Fuel is Unhealthy

Pakistan's reliance on imported fossil fuels is growing, placing the economy at risk of being affected by fluctuations in international energy prices and supply interruptions, although the use of renewable energy is on the rise. In fiscal year 2025 (FY25), fossil fuels imported into the country amounted to about 34 million tons of oil equivalent (Mtoe), making up 41 percent of Pakistan's primary energy supply, up from 37 percent in the previous fiscal year (FY24), according to the "Renewables First, Pakistan Energy Market Review, 2026" (PEMR26) report.

The production of crude oil within Pakistan dropped by 12 percent year-over-year in FY25, while the generation of domestic natural gas fell by 8 percent. Simultaneously, imported crude oil constituted 77 percent of the fuel needed for local refineries. Pakistan's dependence on foreign fuels puts its economy in a position of vulnerability to global price hikes, foreign currency pressures, and interruptions in international energy deliveries.

The report contends that developing domestic renewable energy sources could alleviate this dependency as the nation's fossil fuel production continues to decline.