Targeted subsidies, clean energy to fight crisis

Experts urge urgent reforms amid Middle East tensions, Hormuz disruptions

ISLAMABAD:

Parliamentarians and experts, at a debate on Wednesday, warned that geopolitical tensions, particularly the Middle East conflict and disruptions around the Strait of Hormuz, have exposed Pakistan's vulnerability to external energy shocks, thus there is an urgent need for structural reforms in the energy sector.

At a seminar titled "The Great Energy Debate: Way Forward for Fiscal Discipline", which was organised by the Sustainable Development Policy Institute (SDPI) and Express 24/7, the speakers called for targeted subsidies, integrated energy planning, transparent policymaking and accelerated investment in local and renewable energy resources to steer Pakistan through fiscal and energy challenges.

Federal Minister for Petroleum Ali Pervaiz Malik said Pakistan has successfully maintained seamless fuel supplies despite unprecedented global pressures and volatility in crude oil prices. He pointed out that the government has managed the crisis without adding "a single rupee" to circular debt in the oil supply chain.

Resilient energy value chains could not be built on a single pillar, he stressed and suggested that a practical and economically sustainable energy transition is needed to balance conventional fuels with renewable energy.

The minister revealed that Turkish Petroleum is partnering with local firms for the exploration of new oil fields in Pakistan. The country requires $200 million to $300 million in investment to build the infrastructure necessary for renewable energy expansion, he said, adding that financial interventions are needed to strengthen energy infrastructure and strategic reserves.

Minister of State for Finance Bilal Azhar Kayani said the diversification and indigenisation of the energy supply chain through hydel and solar sources is the priority of the government. He said refinery upgrades are underway to achieve cleaner Euro V-compliant fuel production.

Kayani added that electric vehicles represent the future, and market-driven adoption will increase if EVs become economically viable for consumers.

SDPI Executive Director Dr Abid Qaiyum Suleri said the dialogue is being held at a critical time when the federal budget is under preparation amid an IMF programme and escalating regional tensions.

He said the government has managed fuel supplies efficiently despite global uncertainty, noting that, unlike some regional countries, there has been no fuel rationing in Pakistan. He stressed the need to replace blanket subsidies with targeted support like the Benazir Income Support Programme (BISP).

Suleri urged policymakers to rethink Pakistan's solar energy rollout, grid connectivity and long-term energy mix, arguing that the ongoing Middle East crisis would accelerate the global shift towards nuclear, solar and renewable energy sources.

He observed that energy is no longer just an economic issue, but a strategic one, requiring policy continuity, better governance and greater reliance on indigenous energy sources.

Later, during a panel discussion, he warned that energy supply shocks could worsen as inventories dry up and underscored the need for transparency in government policy and revenue decisions to rebuild public trust. He said the social protection net should be expanded to support the vulnerable middle-income groups, who are increasingly excluded from relief mechanisms.

MNA Dr Nafeesa Shah called for a new energy paradigm based on sovereignty, local resources, renewable energy and equitable energy federalism. She said Pakistan is already facing economic and security challenges, and global energy shocks have made the crisis more severe and immediate.

National Assembly Standing Committee on Finance Chairman Syed Naveed Qamar said there is no short-term solution to the energy crisis, and Pakistan must move towards clean and renewable energy through long-term policy reforms.

Former federal minister Khurram Dastgir said the energy minister faces constant pressure and the government must pursue serious reforms in the sector.

Speakers agreed that Pakistan must urgently rethink its energy policy, as energy security is now directly linked with national security and economic survival.

Senior journalist Fahad Hussain said journalism must go beyond headlines and help people understand global challenges, national security and shifting strategic energy routes.