Islamabad (March 13, 2026) Business leader and former president of the Islamabad Chamber of Commerce, Shahid Rasheed Butt, said on Friday that heavy reliance on imported fossil fuels for electricity is deepening the financial crisis and called for a structured shift to clean energy to stabilise costs and reduce external dependence.
Fossil fuels currently account for roughly 53 percent of Pakistan’s electricity supply, with natural gas and imported coal as the dominant sources. Over 40 percent of power generation relies on expensive re-gasified liquefied natural gas and imported coal, exposing the country to global fuel price swings that directly inflate electricity bills.
Shahid Rasheed Butt said that this dependence has fed a vicious cycle. Circular debt in the power sector stood at Rs5,730 billion, squeezing government finances and forcing repeated tariff hikes on households already struggling with inflation.
The business leader said that the share of fossil fuel generation could be reduced to below 1% over 15 years through aggressive deployment of solar and wind capacity, battery storage, and grid upgrades, avoiding approximately 78 million tonnes of carbon emissions.
The shift to domestically available renewable resources would substantially reduce the foreign-exchange drain from fuel imports, a critical concern for an economy operating under a 7 billion-dollar International Monetary Fund programme, he said.
Rapid growth in rooftop solar is already reshaping demand, with minimum grid load projected to fall to around 3,000 megawatts during daytime periods, requiring investment in storage and grid flexibility to maintain stability.
He noted that policy announcements in Pakistan’s energy sector have historically outpaced delivery, and that grid congestion, financing constraints, and regulatory uncertainty remain significant barriers to renewable expansion at scale.
A cleaner energy mix would also benefit exports, as the European Union’s Carbon Border Adjustment Mechanism will impose levies on high-emission imports, making a low-carbon grid essential for Pakistan’s industrial competitiveness.
