The government has decided to implement several measures, including expanding strategic oil reserves, to ensure a sustainable energy supply across the country. Currently, commercial reserves are maintained for only 20 days. In the Annual Plan 2026-27, the government stated that efforts would be made to reduce dependence on fuel imports and build strategic reserves to cover 30 to 45 days of consumer demand.
Vulnerability to Oil Crisis
The US-Israel-Iran war has left Pakistan vulnerable to an oil crisis due to the absence of strategic oil buffers. While all regional countries, including India, maintain strategic fuel storages, Pakistan has not made meaningful progress on this front. Pakistan has offered all Middle Eastern countries, especially oil-producing nations, to build strategic oil reserves, and they will receive incentives as well.
Refinery Upgrades and Cleaner Fuels
The government is also focusing on upgrading the country's oil refineries to accelerate the transition towards producing Euro V environmentally friendly fuels. It has announced the development of a 500-kilovolt transmission corridor from Ghazi Barotha to Faisalabad under the sustainable energy agenda for fiscal year 2026-27.
Pipeline System and Storage Expansion
Plans are underway to shift fuel transportation from costly road networks to a more efficient pipeline system while expanding terminal storage capacity. Battery Energy Storage Systems (BESS) and Statcom devices will be integrated into the national power network for sustainable energy.
Transmission and Clean Energy Capacity
The new 500kV transmission corridor will have the capacity to transmit 2,300 megawatts of electricity. An additional 1,820 megawatts of clean energy capacity will also be connected to the national grid. The power sector will receive a public investment of Rs151.259 billion under the Public Sector Development Programme (PSDP) 2026-27, aimed at increasing the share of renewable energy in the power generation mix to 30% by 2030.
Private Sector Participation
Public sector investment will be aligned with private participation in refining and liquefied natural gas (LNG) infrastructure to support a data-driven energy future. Under the renewable energy target of 30% of the power generation mix, an additional 3,787 MW of clean electricity generation capacity will be added to the national grid.
Water Infrastructure Projects
A total of 34 core water infrastructure projects valued at Rs1.848 trillion are being implemented, with an allocation of Rs97.354 billion in FY 2025-26. Under the FY27 PSDP, an allocation of Rs74.920 billion has been made for the water resources sector.
