LAHORE: Energy rationing is once again looming over Pakistan, threatening to disrupt industrial output and deepen economic uncertainty. Yet, in the midst of this looming crisis, an unexpected story of resilience has emerged, one that carries important lessons for policymakers.
Punjab’s industry, long deprived of reliable gas supplies, may now be better equipped than the rest of the country to withstand the shock. For nearly two decades, industries in Punjab have operated under chronic gas shortages. What began as a crippling constraint gradually forced a transformation. Unable to rely on pipeline gas, firms were pushed to innovate, investing in alternative energy sources such as biomass, biogas, and solar power. Rice husk, bagasse, municipal waste and even cow dung became viable fuel inputs. Captive power generation, once a backup, became a primary strategy.
This ‘forced adaptation’ has now turned into a structural advantage. As global energy prices rise and domestic rationing intensifies, many Punjab-based industries can revert to or scale up these alternatives. Unlike firms in other provinces that remain heavily dependent on natural gas and grid electricity, Punjab’s industrial base has already internalised the cost of unreliability and built mechanisms to survive it.
However, this advantage should not be overstated. Alternative energy sources come with their own limitations. Biomass availability is seasonal and geographically constrained. As more firms turn to crop waste, its price inevitably rises, eroding the cost advantage. Moreover, the capital required to install and maintain alternative energy systems is beyond the reach of many small and medium enterprises. For energy-intensive sectors such as fertilisers, ceramics and chemicals, substitutes often remain less efficient than natural gas.
In contrast, industries in Sindh and Khyber Pakhtunkhwa (KP) are likely to face sharper disruption. Their historical reliance on gas and centralised electricity systems leaves them more exposed in the short term. Yet, economic reality will force change. As fossil fuel costs escalate, alternative energy will become not just viable but necessary. Punjab’s experience offers a ready-made template, but replication will take time, investment and institutional support.
This brings us to the central policy question: Is Pakistan witnessing a planned energy transition or merely a chaotic adjustment driven by crisis? So far, the evidence points to the latter. Punjab’s shift was not the result of strategic foresight but of prolonged neglect. There was no coordinated policy to promote biomass markets, no structured financing for decentralised energy systems, and no serious investment in waste-to-energy infrastructure. Industries adapted because they had no choice.
This lack of policy direction now risks creating an uneven and inefficient transition. Larger firms, with access to capital, will continue to invest in alternative energy and maintain operations. Smaller enterprises, already under pressure from high interest rates and inflation, may simply shut down. Regional disparities could widen, with Punjab pulling ahead while other provinces struggle to catch up.
Yet, within this disorder lies an opportunity. If managed intelligently, the current crisis could serve as a turning point in Pakistan’s energy landscape.
First, the government must recognise and formalise the role of alternative energy in industrial production. Biomass supply chains need to be organised, with transparent pricing and logistics support. Second, targeted financing mechanisms should be introduced to help SMEs transition to hybrid energy systems. Third, municipal waste, currently an environmental liability, can be converted into a reliable energy source through public-private partnerships.
Most importantly, tariff structures must be rationalised to incentivise efficiency rather than penalize consumption. Without coherent pricing signals, industries will continue to make suboptimal investment decisions.
The broader shift underway is toward decentralization. Industries are moving away from reliance on the state toward self-generation and distributed energy systems. This has significant implications not only for industrial competitiveness but also for Pakistan’s balance of payments, as reduced dependence on imported fuels eases external pressures.
Punjab’s experience demonstrates that resilience can be built, but at a cost. The question is whether the rest of the country will be forced to pay the same price through years of uncertainty, or whether policymakers will step in to guide a smoother transition.
