Pakistan faces an intensifying energy crisis amid the ongoing Middle East war involving Iran, the United States, and Israel, with no signs of de-escalation in sight. Brent crude prices have surpassed $100 per barrel, and government projections warn of a monthly oil import bill climbing to $600 million—or $7.2 billion annually if the conflict persists.

This surge, fuelled by the effective closure of the Strait of Hormuz since late February, could drive prices to $120 per barrel, expanding the current account deficit by $5–7 billion and further stoking inflation.

On the other hand, energy demand rebounds strongly, projected to grow 3–4% annually through 2029, bolstered by industrial resurgence and population expansion. Solar innovations offer a vital buffer against these pressures.

With energy imports draining a fifth of foreign reserves, the next three years demand bold reforms to enhance self-sufficiency and cushion against escalating fiscal strains.

Early 2026 electricity demand has shattered records, with January generation up 12.1% year-on-year to 9,140 gigawatt-hours, reversing prior stagnation. Following 2.6% average annual growth from 2020 to 2024, expectations now point to 3–4% yearly rises through 2029, mirroring GDP projections of 3.6% for fiscal year 2026 and around 3% thereafter.

Consumption may reach 126–128 terawatt-hours this year, advancing to 140–150 terawatt-hours by 2029 under standard scenarios. Climate influences exacerbate this, as a 1°C temperature rise could elevate peak summer demand by 8.5%, intensifying seasonal disparities where summer loads double winter ones.

Energy intensity is expected to drop from 11% in 2026, aided by efficiency initiatives that could moderate overall resource demands.

Sectoral analysis reveals varied trajectories. Residential consumption, at 49–50% or about 40 terawatt-hours in early 2026, anticipates 2–3% annual growth to 2029, propelled by appliance proliferation and household electrification.

However, off-grid solar may constrain grid share to 45–48%.

Industry, comprising 26–30% at 28–35 terawatt-hours, shows robust momentum. Late 2025 increases of 35–58% signal 5–7% yearly expansion to 2029, as lower tariffs attract captive users, adding 280 connections and boosting output.

In fiscal year 2025, petroleum imports totalled $15.94 billion, down 5.8% year-on-year due to solar offsets and reduced volumes

In fiscal year 2025, petroleum imports totalled $15.94 billion, down 5.8% year-on-year due to solar offsets and reduced volumes

Agriculture, at 8–9% or 9–11 terawatt-hours, encounters grid reductions—down 11% year-on-year in 2025—from solar tubewells. This shift could trim its portion to 7% by 2029.

Commercial demand holds at........

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