Pakistan’s reliance on imported fossil fuels increased to 41% of its primary energy supply in fiscal year 2024-25, exposing the country to greater risks from international fuel prices, currency pressures and disruptions in global energy markets.
Imported fossil fuels accounted for approximately 34 million tonnes of oil equivalent (Mtoe) during FY25, compared with 37% of the country’s primary energy supply in the previous fiscal year, according to the Pakistan Energy Market Review 2026 (PEMR26), published by energy think tank Renewables First.
The increase comes as domestic production of conventional energy resources continues to weaken. Local crude oil output declined by 12% year-on-year in FY25, while natural gas production fell by 8%, increasing the pressure on Pakistan to meet its energy requirements through foreign supplies.
The report also found that imported crude oil supplied 77% of the requirements of Pakistan’s local refineries, highlighting the refining sector’s exposure to international oil markets.
Pakistan’s Energy Import Dependence Increases
The latest figures underline a persistent challenge for Pakistan’s energy sector. Although the country has expanded its use of renewable energy, imported fossil fuels continue to account for a substantial share of its overall energy supply.
The increase from 37% in FY24 to 41% in FY25 means a larger proportion of the country’s primary energy requirements is linked to fuel sourced from international markets.
This dependence leaves Pakistan vulnerable to fluctuations in global oil and gas prices. When international fuel prices rise, the impact can extend beyond the energy sector, increasing import costs and putting additional pressure on foreign exchange reserves.
A weaker rupee can make the situation more difficult because imported fuel becomes more expensive in local currency, even when international prices remain unchanged.
Declining Domestic Oil and Gas Production Adds to Pressure
Falling domestic production is another factor behind Pakistan’s growing reliance on imported energy.
According to PEMR26, crude oil production declined by 12% in FY25, while domestic natural gas output dropped by 8%. These reductions limit the contribution of locally produced fossil fuels to national energy requirements.
The trend also creates challenges for industries, power producers and refineries that depend on a consistent supply of energy.
Pakistan’s Annual Plan 2025-26, published by the Ministry of Planning, Development and Special Initiatives, identifies natural gas and oil as major components of the country’s primary energy supply. It estimates total primary energy supply at 83 Mtoe for FY25, underlining the scale of the country’s energy requirements.
The official document can be consulted through the Ministry of Planning’s Annual Plan 2025-26.
Imported Crude Supplies 77% of Local Refinery Requirements
Pakistan’s refining industry is also heavily exposed to overseas oil supplies.
The Renewables First review found that imported crude oil met 77% of the requirements of local refineries in FY25. This level of dependence makes refinery operations more sensitive to changes in international crude prices, shipping costs and supply conditions.
Any significant disruption in global oil shipments could increase procurement costs and complicate the supply of petroleum products in the domestic market.
For an economy that relies on imported crude and refined petroleum products, these risks can also affect the country’s overall import bill and external account position.
Can Renewable Energy Reduce Pakistan’s Fuel Import Bill?
Expanding domestic renewable energy could help Pakistan reduce its exposure to imported fossil fuels, according to the report.
Solar, wind and other indigenous energy sources offer an opportunity to meet a greater share of domestic demand without relying on recurring purchases of imported oil, gas and coal.
Pakistan has already experienced a rapid expansion in solar adoption, particularly through rooftop installations by households, businesses and agricultural consumers. However, the latest figures show that the growth of renewable energy has not yet eliminated the country’s dependence on imported fossil fuels.
A sustained transition will require more than increasing solar installations. Investment in transmission and distribution infrastructure, energy storage and a stable regulatory framework will also be important to integrate renewable power into the wider energy system.
The central challenge for policymakers is to reduce the economy’s exposure to imported fuel while ensuring reliable and affordable energy supplies for households, industry and businesses.
