Pakistan’s energy sector, which was once hailed as a beacon of progress, now stands as a testament to the perils of short-term policymaking and a lack of cohesive strategy.

What began as a series of well-intentioned but disjointed decisions has spiralled into a complex web of inefficiencies, financial losses, and systemic dysfunction. The patchwork of policies in the energy sector is coming back to haunt us, exposing the fragility of a system built on quick fixes rather than sustainable solutions.

The consequences are dire: expensive imported gas lies unused, local gas production is stifled, circular debt mounts, and industries struggle to survive under the weight of unaffordable energy costs. This is the story of how Pakistan’s energy sector became a cautionary tale—and what can be done to fix it.

The rise of captive power plants and the natural gas dilemma

In the early 2000s, Pakistan faced a crippling electricity shortage. To address this, the government encouraged industries to set up captive power plants, which were designed to run on natural gas.

At the time, this seemed like a prudent move. Natural gas was relatively cheap and abundantly available, making it an attractive fuel source for power generation. Industries embraced the policy, and captive power plants proliferated, providing a temporary reprieve from the energy crisis.

However, this solution was built on shaky foundations. As demand for natural gas grew, domestic production failed to keep pace. Instead of incentivizing local exploration and production (E&P) companies to scale up output, the government turned to imports. Liquefied Natural Gas (LNG) from Qatar and other sources became the new lifeline for Pakistan’s energy needs. This decision marked the beginning of a downward spiral.

The LNG gamble: a costly........

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