Energy security in Pakistan: Perspectives and policy implications from a quantitative analysis

Abstract

Pakistan imports nearly a third of its energy resources in the form of oil, coal and Liquefied Natural Gas (LNG). An import-driven energy policy is not sustainable for Pakistan, making it energy insecure in the long-term. Besides being a drain on its foreign exchange reserves, it exposes the economy to international energy price shocks putting the entire economy at risk through inflation. Inflationary pressures reduce the competitiveness of the country's exports which further constrain the economy's capacity to pay for energy imports. This paper analyzes Pakistan's energy security under the 4-A framework over the six-years period 2011–2017. The 4-As methodology attempts to measure and illustrate graphically the change in the energy security of a region by mapping it on to four dimensions – namely availability, applicability, acceptability, and affordability. The analysis indicates that Pakistan's energy security improved initially over the first three years but then deteriorated over the next three years. Despite significant investments in energy infrastructure over the last five years, Pakistan continues to be energy insecure. This paper recommends immediate and rapid adoption of green energy solutions like distributed solar and smart metering and increased conservation efforts like developing and implementing building insulation standards to turn the tide on energy insecurity.