ICMA Warns of Rising Risks from Pakistan’s Dependence on Imported Fossil Fuels

The Institute of Cost and Management Accountants of Pakistan (ICMA) has released a comprehensive overview and SWOT analysis of Pakistan’s fossil fuel import industry.

The report highlights the country’s growing dependence on imported oil and liquefied natural gas (LNG) as domestic energy reserves continue to decline.

Energy demand increases amid limited local resources

According to the report, Pakistan’s energy mix still relies heavily on oil, gas and coal.

At the same time, nuclear power, hydropower, wind and solar energy contribute to the national energy supply.

However, limited domestic resources and rising demand continue to place pressure on the energy sector.

As a result, stable and affordable energy supplies remain critical for economic growth and industrial development.

Government pursues energy reforms

To address these challenges, the government has introduced several reforms and long-term development initiatives.

These include Vision 2025 and the Medium-Term Development Framework.

The policies aim to improve energy efficiency, modernize infrastructure and encourage private-sector investment.

Moreover, they seek to strengthen long-term energy security and sustainability.

LNG imports decline as solar energy expands

ICMA noted that Pakistan’s dependence on imported energy has increased because of falling domestic gas production.

Since LNG imports began in 2015, consumption has gradually declined from 8.2 million tonnes in 2021 to an estimated 6.1 million tonnes by 2025.

Meanwhile, distributed solar power has expanded rapidly.

The report estimates that solar energy capacity reached nearly 34 gigawatts by 2025.

Furthermore, Pakistan imported almost 50 gigawatts worth of solar panels between 2017 and 2025.

That figure is nearly equal to the country’s national grid capacity.

Import-heavy structure creates vulnerabilities

The publication warns that Pakistan remains vulnerable to global energy market disruptions.

International conflicts and supply-chain challenges can increase fuel prices and affect energy availability.

In addition, ICMA highlighted structural imbalances in the LNG sector.

Long-term LNG contracts signed under higher demand projections have increased financial pressure on the system.

Consequently, circular debt has risen to approximately Rs1.889 trillion.

SWOT analysis highlights opportunities and threats

The report identified several strengths, including existing fuel supply capacity and energy infrastructure.

However, it also pointed to weaknesses such as heavy import dependence and rising energy costs.

On the positive side, opportunities exist in renewable energy expansion and domestic resource exploration.

Nevertheless, global price volatility and geopolitical tensions continue to pose significant risks.

Clean energy transition remains key goal

ICMA noted that Pakistan aims to generate 60 percent of its electricity from clean energy sources by 2030.

Despite that target, fossil fuels will continue to play an important transitional role in the energy sector.

Therefore, policymakers must balance energy security with sustainability goals.

Call for comprehensive structural reforms

The report emphasized the need for policy reforms, infrastructure upgrades and efficient energy management.

It also called for greater investment in renewable energy and indigenous resources.

According to ICMA, comprehensive reforms are essential to reduce dependence on imported fuels.

Without such measures, Pakistan could remain exposed to external economic shocks, fiscal pressures and long-term energy insecurity.