Pakistan’s energy crisis is often described as a shortage of power, gas or fuel. But that is only part of the story. The deeper problem is that we have built an energy economy that is expensive, fragile and poorly coordinated even though the country has power plants, gas infrastructure, LNG terminals, renewable potential and industrial demand. The result is a painful contradiction. Households struggle with unreliable and unaffordable energy, poorer families are pushed toward firewood, coal or LPG, industries lose competitiveness, and the state keeps accumulating liabilities. This is not simply an energy shortage; it is a policy-made economic threat.

That is why Hyman Minsky’s warning about financial instability is so relevant. Minsky argued that long periods of apparent stability can encourage decisions that quietly make a system more fragile. The same logic applies here. Pakistan’s energy sector did not become vulnerable overnight; it became vulnerable through years of choices that looked manageable in isolation but dangerous when added together. Look at how we got here. We built power plants without first ensuring that electricity could be transmitted, sold and paid for. We developed LNG infrastructure while adopting policies that weakened commercial demand. We discouraged investment in domestic gas while becoming more dependent on imports. And by pushing tariffs higher and higher, we nudged many consumers away from the grid, then tried to recover fixed costs from the customers who remained. This is how Pakistan’s energy bubble was created.

The economics of a self-inflicted crisis

Minsky warned that financial systems can reach a point where they need refinancing and fresh borrowing simply to stay afloat. Pakistan’s energy-sector circular debt looks uncomfortably similar. Weak collections and structural inefficiencies keep creating liabilities. Tariff increases and fiscal transfers provide temporary relief, but the underlying economics remain unresolved. Raising tariffs without fixing efficiency often makes the problem worse. Businesses cut production, switch fuels or install solar. Grid sales fall, fixed obligations are spread over fewer units, tariffs rise again, and demand falls further. No business can survive forever by charging more to fewer customers. Yet that is increasingly how our power market behaves.

Natural gas: destroying the value of our inheritance

Domestic gas is not just another commodity. It is a strategic input for power generation, fertilizer, textiles, chemicals and many other sectors. Its value should not be judged only by what producers earn or utilities recover, but by what it makes possible: exports, jobs, industrial output and lower dependence on imports. Exploration needs credible pricing, timely payments and access to........

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