Karachi has long lived with an unstable and increasingly expensive energy system, shaped by rising tariffs, gas shortages, unreliable supply and extreme summer heat. But the recent regional instability surrounding escalating US-Iran tensions, combined with renewed RLNG supply disruptions, has once again exposed how vulnerable Karachi remains to global energy shocks.
ENERGY SECTOR
Karachi has long lived with an unstable and increasingly expensive energy system, shaped by rising tariffs, gas shortages, unreliable supply and extreme summer heat. But the recent regional instability surrounding escalating US-Iran tensions, combined with renewed RLNG supply disruptions, has once again exposed how vulnerable Karachi remains to global energy shocks.
This pattern is familiar. In 2022, LNG shortages following Russia’s invasion of Ukraine triggered a nationwide energy crunch. Pakistan struggled to secure imports, RLNG supplies tightened and power shortages spread across the country. Karachi bore a disproportionate share of the impact due to K-Electric’s dependence on imported fuel and gas-based generation.
Today, the same structural dependence is being revealed again, as tensions in global energy and shipping routes feed directly into domestic supply instability. Electricity and gas are not separate crises but outcomes of the same underlying vulnerability: an energy system tied overwhelmingly to imported fossil fuels, with limited buffers and little meaningful diversification.
Over 80 per cent of K-Electric's generation capacity runs on imported fossil fuels, including furnace oil, diesel, gas and coal. Against summer peak demand exceeding 3,500MW, the utility has only around 100MW of renewable energy in its mix. This leaves Karachi acutely exposed to disruptions in LNG markets. When supply disruptions hit, there is little insulation in the system and shocks are transmitted directly into shortages, tariffs, and load-shedding.
Having been a private company since 2005, KE’s two decades of operating as an essential public utility should have produced the kind of long-term planning and investment that reduces this exposure. Its structural challenges further compound this fragility. Transmission and distribution losses remained above Nepra’s approved target for two consecutive years, 15.99 per cent in FY2023-24 and 14.74 per cent in FY2024-25, against a target of 14.58 per cent, creating a financial impact of roughly Rs7.5 billion. At the same time, KE’s revenue recovery gap has climbed to nearly Rs75 billion, the second highest among Pakistan’s utilities, despite the company controlling the full supply chain.
Meanwhile, KE’s generation fleet produces electricity higher than the average national grid price. Consumers have responded accordingly by cutting dependence on the grid: electricity sales have declined since FY2020-21, while average residential consumption per connection has fallen from 5 MWh to 3.9 MWh.
Unless Karachi breaks its dependence on imported fossil fuels, every future geopolitical shock will continue pushing its most vulnerable residents deeper into poverty
Approximately 30 per cent of KE's network is in lower-income neighbourhoods that experience up to 10 hours of daily commercial load-shedding. These areas are also among the city’s most densely populated: nearly two-thirds of Karachi’s population lives on less than a quarter of its land area, intensifying the effects of outages, heat and infrastructure stress. This population forms the city's working core, yet they bear the heaviest loadshedding, the least reliable gas supply and the least access to private alternatives.
The fuel cost adjustments passed on to consumers by KE fall on these households, with no recourse and no compensation mechanism. They are often forced into impossible trade-offs: running fans during dangerous heatwaves or paying for groceries, charging UPS batteries or affording medicine, buying LPG cylinders during gas shortages or cutting meals altogether.
This is where energy poverty becomes cyclical. Pakistan’s solar boom, while significant, has largely been driven by private investment by households and businesses that can afford to go off grid. In Karachi, while some areas are increasingly able to insulate themselves from outages and rising tariffs through rooftop solar and backup systems, lower-income communities remain trapped in an increasingly expensive and unreliable network.
At the same time, climate destruction is making Karachi even harder to live in. Longer heatwaves, worsening humidity, urban flooding and water stress are intensifying pressure on already fragile infrastructure. The availability of electricity is directly tied to survival: cooling, refrigeration, water pumping, and basic urban functioning all depend on it. Yet millions remain one outage away from dangerous or unlivable conditions.
Pakistan’s rapid citizen-led solar transition proved that consumers already understand the direction of change. Demand is shifting toward cheaper, decentralised and cleaner electricity. The problem is not technological readiness but policy failure. Public energy policy has not kept pace with the rapid transformation of the household energy system. Karachi’s transition to clean energy now needs to move far more urgently and at a much larger scale.
That means scaling renewable energy beyond private rooftop ownership: directing climate finance toward decentralised solar in low-income communities, upgrading transmission infrastructure, enabling battery storage and treating clean electricity as public infrastructure rather than a luxury consumer product. Unless Karachi breaks its dependence on imported fossil fuels, every future geopolitical shock will continue pushing its most vulnerable residents deeper into poverty.
The writer is a research associate at Partners in Development and Consultancy (PIDC).
