Forum warns against costly long-term energy contracts

ISLAMABAD: The Parliamentary Forum on Energy and Economy has urged the government to avoid entering into long-term energy contracts that could expose Pakistan to costly take-or-pay obligations and add to circular debt, calling instead for a more flexible approach to LNG and other fuel imports as rapid solar adoption transforms the country’s energy landscape. Members of National Assembly (MNAs) from the PPP, PML-N and PTI, along with national and international energy experts, participated in a roundtable dialogue titled “The Sun and the Pipeline: Energy Contracts in an Era of Solar Disruption in Pakistan. ” The participants examined Pakistan’s changing RLNG requirements, geopolitical risks, global energy-market volatility, and policy options to protect consumers while maintaining energy security. READ MORE: Pakistan purchases more expensive LNG as flows via Strait of Hormuz fail to recover: report According to estimates presented at the dialogue, Pakistan has deployed around 50 GW of solar capacity in just a few years across utility-scale, net-metered, agricultural, off-grid and behind-the-meter systems, largely without public subsidy. The installed capacity is estimated to generate approximately 54. 75 TWh annually, equivalent on a gross energy basis to nearly 1, 279 MMCFD of gas-fired generation. Speakers said the scale and speed of solar deployment represented a structural transformation that had outpaced many assumptions underpinning Pakistan’s long-term gas and LNG commitments. Dr Nafisa Shah, Convener of the Parliamentary Forum on Energy and Economy and Member of the National Assembly, said Pakistan needed to rethink its energy mix and regulatory framework in light of the rapid expansion of solar generation. “Pakistan has deployed an estimated 50 GW of solar capacity across its rooftops and other segments. Our energy policies must reflect this new reality and ensure that people finally receive the affordable energy they have missed for so long because of long-term take-or-pay contracts that have trapped us in prohibitively expensive electricity, ” she said. She stressed that the issue was not simply a choice between solar and LNG, but the development of a flexible and competitively priced energy system that could ensure security without penalising the country’s growing distributed-generation sector. Barrister Danyal Chaudhry, Parliamentary Secretary for Information and Broadcasting and Secretary of the Parliamentary Forum on Energy and Economy, said the debate should move beyond treating solar and gas as competing alternatives. “We should not ask whether Pakistan chooses the sun or the pipeline. We should ask how the sun, the pipeline, the grid and emerging technologies can work together to provide Pakistan with affordable, reliable and secure energy, ” he said. Muhammad Arif, former Member Gas at (Oil and Gas Regulatory Authority (Ogra) and a petroleum law, policy and regulatory adviser, emphasised the need to integrate energy governance and develop mechanisms to monetise surplus solar generation, particularly during periods of high solar output. Asim Riaz, Energy Advisor at the All-Pakistan Textile Mills Association, said Pakistan’s LNG challenge was no longer limited to securing supplies. “Pakistan’s LNG challenge is about demand, flexibility, affordability and market design. The sun has not eliminated the need for LNG. It has changed when RLNG is needed, how much is needed, and what kind of LNG portfolio Pakistan can afford, ” he said. Energy journalist and Energy Flux founder Seb Kennedy said Pakistan was experiencing a consumer-led energy transition at a pace faster than the state’s planning system could adapt. He attributed the transition to high electricity tariffs, unreliable power supplies and declining solar costs rather than central planning. He called for a shift away from rigid volume commitments towards greater flexibility, optionality and market access, while ensuring that the cost of the energy transition did not disproportionately fall on vulnerable consumers. MNA Huma Chughtai called for greater consistency and clarity in policymaking, particularly in assessing supply, demand and broader challenges confronting Pakistan’s economic and energy sectors. She also emphasised the need for stronger representation of the Planning Division in the policymaking process. MNA Mobeen Arif Jutt highlighted the burden of high electricity tariffs on ordinary consumers and called for meaningful structural reforms in the electricity sector, with particular attention to low-income and vulnerable communities. Syed Faizan Shah, Energy Expert and Adviser to the Power Minister, said Pakistan’s priority should not merely be adding more generation capacity but building a more resilient and efficient energy system. “Our focus is on building an energy system that is more resilient to external price shocks and more efficient across generation, transmission and distribution, ” he said. He added that expanding indigenous solar generation, supported by battery energy storage and other modern technologies, could improve system flexibility and reliability, reduce losses, optimise existing infrastructure and protect consumers from international fuel-price fluctuations. The participants broadly agreed that Pakistan’s rapidly changing energy mix required a reassessment of existing LNG procurement strategies and long-term contractual commitments, with greater emphasis on flexibility, affordability, storage and integration of renewable energy into the national grid. Copyright Business Recorder, 2026

Read full story on Business Recorder