New Delhi, March 11: Petrol and diesel prices in Pakistan have increased by nearly Rs 55 per liter after the outbreak of the Iran war, reflecting the country's energy import dependence in recent years, according to a report in Pakistani media.
As global oil prices surge and shipping costs rise due to war premiums and security risks, Pakistan has little choice but to pass on the increase to consumers. However, according to a report in the Karachi-based Business Recorder, the Rs 55 per liter increase may only be the beginning.
If the conflict persists, the increase in oil prices will lead to higher transportation costs, rising food prices, accelerating inflation, and a significant increase in the cost of doing business.
The report states that Pakistan is vulnerable to global energy shocks due to a structural policy failure. The country designed its energy system around imported fuels, despite possessing substantial domestic energy resources. In doing so, policymakers largely ignored the most critical principle of national energy planning: energy security, the report lamented.
What makes this situation even more troubling is that Pakistan is not a country lacking energy resources. On the contrary, it is richly endowed with indigenous energy potential.
The Thar coal reserves are among the largest lignite deposits in the world, which have the potential to generate 100,000 megawatts for more than a century. Properly developed, they could supply a substantial portion of Pakistan's baseload electricity for decades at significantly lower cost than imported fuels.
Pakistan also possesses enormous hydropower potential, estimated at more than 60,000 megawatts, much of which remains untapped. In addition, the country lies in one of the world's most favorable regions for solar energy, while the wind corridors of Sindh and Balochistan offer significant renewable power potential, the report pointed out.
Given these advantages, Pakistan had a clear strategic option: build its energy system around indigenous resources. However, the fact that it did not constitutes a strategic policy failure, the report observes.
The importance of energy security has been repeatedly raised over the past two decades. Many analysts have consistently argued that Pakistan must reduce its dependence on imported fuels and prioritize domestic resources. Had Pakistan converted a substantial portion of its energy generation to a combination of hydropower and Thar coal, the country's economic trajectory would look very different today, the report added.