By Muhammad Luqman

Business leaders have argued that Pakistan needs to shift into an economic emergency mode to deal with energy supply risks stemming from ongoing tensions in the Middle East, instead of relying on short-term measures.

“The global energy crisis has provided a rare opportunity for Pakistan to review its economic weaknesses and reposition itself in line with new realities,” said Zaki Aijaz, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

Talking to Wealth Pakistan, he said the energy sector must be treated as a matter of national security, with a strategic shift towards local resources such as hydel, solar, nuclear and Thar coal.

He added that expanding solarisation of industry and agricultural equipment, including tubewells, could help reduce vulnerability to external shocks and prevent similar crises in the future.

Aijaz also called for a review of costly LNG contracts and the development of strategic oil reserves to strengthen energy security.

He said the Middle East conflict had exposed Pakistan’s structural weaknesses. “The conflict did not create Pakistan’s crisis — it only revealed long-standing vulnerabilities,” he noted.

Pakistan remains heavily dependent on imported oil and gas, while also facing a weak export base and limited foreign exchange reserves, he added.

To ease external pressure, Aijaz stressed the need for a “Make in Pakistan” campaign to discourage imports of goods already produced locally.

He suggested that non-essential imports, including luxury items such as chocolates, perfumes and cosmetics, should be temporarily restricted until the economy stabilises. “Survival must come first; convenience can follow later,” he said.

While acknowledging recent energy conservation measures taken by federal and provincial governments, he described them as temporary. “A structural crisis cannot be resolved through administrative decisions alone,” he warned.

He emphasised that Pakistan must adopt an export-led growth strategy rather than focusing solely on import substitution.

Aijaz also recommended a regional trade approach, urging greater focus on exports to China, Central Asia and neighbouring countries instead of distant markets.

Referring to risks around the Strait of Hormuz amid the Middle East tensions, he highlighted the need to explore alternative trade routes to reduce exposure to disruptions.

Economists have also stressed the importance of diversifying crude oil import sources to enhance resilience.

“Russian crude could be a viable option; otherwise, Pakistan may have to rely on more expensive alternatives such as American WTI,” said Dr Qais Aslam, an economist and head of the Economics Department at a private university in Lahore.

He emphasised the need for a sustainable energy conservation strategy instead of reactive, short-term measures.

He warned that rising global oil prices could significantly increase Pakistan’s import bill. “Every $10 increase in oil prices raises the annual petroleum import bill by about $1.8 to $2.0 billion,” he said, citing a report by the Pakistan Institute of Development Economics.

Dr Aslam added that easing tensions with Afghanistan could help Pakistan regain access to Central Asian markets and secure low-cost electricity from Tajikistan under the CASA-1000 project.

Credit: INP-WealthPk