Pakistan must ‘electrify’ now

The recent closure of Strait of Hormuz was a reminder that our entire mobility is impacted by global events. It disrupted almost 20 per cent of the global oil and liquefied natural gas (LNG) flows, causing Brent Crude to soar above USD 120 per barrel. For Pakistan, a country which is structurally reliant on this particular maritime artery, it is not merely a market fluctuation; in fact, a full-scale economic meltdown. The crude oil import bill for the country has increased 54 percent within last one month alone. As the International Energy Agency (IEA) reported, the current geopolitical tensions are causing the worst energy crisis in history. The real question is: How long can further Pakistan afford to remain stuck in this oil dependency trap? Pakistan is structurally exposed to global oil markets beyond its control. The ongoing crisis is a warning to reduce reliance on crude oil. Transport, which is the biggest oil-gulp sector, should be the beginning point of change. Over 75 percent of the imported oil is consumed by the transport sector. Around 40 per cent oil is consumed by two-wheelers and three wheelers that form a major chunk of the transport sector. Therefore, transport electrification is no longer just an environmental necessity, but it has become equally important for achieving energy security and economic resilience in order to protect our economy from global oil shocks. To achieve this, the government needs to fast-track the targets of the New Energy Vehicle Policy. The government needs to fast-track the process and move forward rather than just posting tweets. Pakistan is a laggard in electric vehicle adoption as less than 3 per cent of total car sales in Pakistan are EVs. Solar adoption in the country is an example for us that rapid transformation is possible when barriers are removed, incentives are given, and there are clear policy directions. A major hurdle to this transition is the “EV financing gap” and lack of proper regulations that would allow banks to provide easy loans to people for EVs. Consistent policies and elimination of financing caps are very important in order to maintain investor confidence. Another most important factor is the cost. The upfront cost of EVs is quite high in Pakistan if we see the demand side. However, if we factor in the hidden costs of oil including health issues, environmental impact, and currency depreciation, the EVs become a cheap option. The ongoing Middle East tensions should be seen as an opportunity to include transport electrification in future federal and provincial budgets. It’s high time we put a pause in road expansion and reallocate resources for EV-compatible infrastructure. New schemes need to be introduced for replacement or retrofitting of existing vehicles, especially two-wheelers and three-wheelers that serve as the backbone of mobility for millions in the country. In addition, railways need to be brought back into transport policy and to be electrified as 99 percent of the rail network of India is already electrified. The government needs to work on formulating policy and regulations regarding retrofitting of transport as it can be a budget-friendly process as compared to buying new EVs, but companies are hesitant as no policy exists. Furthermore, phased sequencing is very important. In the initial phase, two-wheelers and three-wheelers should be prioritised. This can be followed by passenger cars and eventually, public transport like buses, trains, and water transport as well. EV-compatible infrastructure is another critical piece of the puzzle. Currently, charging infrastructure remains inadequate. There is a noticeable lack of interest of power sector in selling electricity for EVs in the country with almost no charging stations installed by any of the power sector entities except for a few installed by K-Electric in collaboration with Shell. We need to learn from the example of China, where the Strait of Hormuz closure shock was absorbed in a very structural manner because 50 percent of new vehicles sold there are EVs. Pakistan needs to follow the practice of China in creating a structural ecosystem that includes localised manufacturing, battery storage, extensive subsidies, and charging infrastructure. Beijing demonstrated how proactive policy creates resilience. Local battery manufacturing is very important; otherwise, it would merely shift dependency. We should explore alternatives like sodium-ion and semi-solid state batteries in case the prices of lithium surge. Institutional and political will remains the decisive variable. Treating EV sector separately from automobile sector, ensuring long-term policies, proper electrification plan, and binding targets are non-negotiable. It is a new paradigm shift and until we don’t change our mind-sets for this paradigm shift things are not going to work. We must move beyond the choke points of the past because Pakistan cannot afford another decade of hesitation. As global energy markets remain volatile and the country continues to face structural vulnerabilities due to its heavy reliance on imported fuels, electric mobility can serve as a pathway towards economic resilience, reduced import dependency, and sustainable growth. Copyright Business Recorder, 2026

Read full story on Business Recorder