Pakistan’s National Energy Conservation Program

By Dr. Mehmood Ul Hassan Khan | Gwadar Pro Dec 24, 2022

Editor's Note: The author is Dr. Mehmood Ul Hassan Khan, Executive Director of the Center for South Asia & International Studies (CSAIS), Islamabad, and Regional Expert on China, CPEC & BRI. This article only reflects the opinion of the author, not necessarily of Gwadar Pro.


Energy security has become a hot topic in Pakistan as well as around the globe. Looming Russia-Ukraine conflict, unnecessary constant tightening of the US Federal Reserve and last but not least the weak prospects of regional as well as the world economies have badly affected developing countries like Pakistan.

Pakistan's economy has been further exposed due to worsening current account deficit, unbridled energy import bill, declining worker remittances, closure of textile units, oil refineries, stagnation of exports, price hike and inflationary trends.

At last, the incumbent federal government has announced a National Energy Conservation Program (NECP) in the country, hoping to curb looming economic woes.  It is expected to save up to $1.15 billion for the national exchequer. Hopefully it will reduce energy import bills through energy efficiency and saving and it will also decrease energy demand in the country.

According to the Pakistan Economic Survey (2021-2022) the import cost for oil increased by 95.9 percent to $17.03 billion between July and April 2022, which is still on the rise creating lots of economic problems for the policy makers to maintain economic discipline, financial viability, industrial productivity, and social comfort in the country. Therefore, immediate implementation of NECP should be able to achieve some strategic economic cushion sailing the economy and its people towards safe shores of prosperity and productivity.  

Critical analysis reveals that the proposed NECP has complete road map, however it would achieve the desired goals of reduction in energy import bill and economic sustainability within next two to three years. On the other hand, the incumbent government is striving hard to meet its financial commitments having a fiscal deficit along with sky high energy prices and lower foreign exchange reserves. Therefore, the recently announced NECP should be implemented as soon as possible.  

To conclude, there is an urgent need to curb the widening differential between the interbank and open market rupee-dollar parity to restore economic stability in the country. All political parties should agree to a permanent charter of economy which includes high growth, social development, energy production, structural reforms in the diverse sectors of economy, especially in power. Finally, they should reduce inflation and price hike in the country despite of any political party in the government.

Moreover, sincere diplomatic efforts should be initiated to secure the Chinese support to overcome the looming energy deficit and promote energy efficacy and saving in the country.  China-Pakistan Economic Corridor (CPEC) has already achieved economic wonders in the country and so far has invested more than $ 25.4 billion. It has added more than 6,040 megawatts of electricity and 886 kilometers of core national transmission network and 510 kilometers of highways under the flagship project of CPEC in the country.

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