Federal Minister for Power Awais Leghari outlined Pakistan’s long-term strategy to transform its electricity sector, setting an ambitious target of raising the share of clean energy in the national power mix to 90 percent by 2035. The announcement came during the Solar, Storage and Flexibility 2026 Conference, where the minister also highlighted key policy hurdles, including restrictions under Pakistan’s International Monetary Fund (IMF) programme that are delaying the introduction of a market-based electricity pricing mechanism. Speaking at the conference on Tuesday, Leghari said the government was pursuing a major shift in energy policy by moving away from a traditional generation-focused model towards a system centred on grid flexibility, energy security, battery storage and domestic manufacturing. He said the new approach is designed to reduce Pakistan’s dependence on imported fuels, shield consumers from volatile global energy prices and maximise the benefits of the country’s rapidly expanding solar sector. The minister said Pakistan has witnessed remarkable growth in rooftop solar installations, with nearly 38 gigawatts of distributed solar capacity now installed through private consumer investment. He described the rapid adoption of rooftop solar as one of the country’s biggest energy success stories but cautioned that it has also created new challenges for the national power system. According to Leghari, Pakistan generates significant amounts of electricity from solar energy during daylight hours, yet the absence of sufficient battery storage infrastructure prevents that surplus electricity from being utilised during evening peak demand. He stressed that without modern storage systems, the country would continue to struggle with balancing electricity supply and demand despite having abundant renewable energy resources. Referring to disruptions in Re-gasified Liquefied Natural Gas (RLNG) supplies earlier this year, the minister said the episode exposed Pakistan’s continued dependence on imported fuels. He noted that the interruption in fuel supplies led to electricity shortages and load shedding even though ample solar power was available during the daytime, highlighting the urgent need for large-scale energy storage. “Battery storage is no longer an optional technology—it has become a strategic national asset that is essential for ensuring Pakistan’s energy sovereignty,” Leghari said. He noted that clean energy sources, including hydropower, nuclear, wind and solar, currently contribute approximately 55 percent of Pakistan’s total electricity generation. However, he warned that achieving the government’s renewable energy targets would require significant investment in battery storage systems, transmission infrastructure and power market reforms. The minister emphasised that expanding renewable generation alone would not be sufficient unless supported by a modern electricity network capable of storing and transmitting clean energy efficiently. To support the country’s long-term energy transition, Leghari announced a three-point strategy. The plan includes expanding battery energy storage systems across the national grid, encouraging local battery manufacturing and assembly to reduce reliance on imports while creating employment opportunities, and introducing regulatory reforms aimed at providing long-term certainty and confidence for domestic and foreign investors. During a question-and-answer session following his address, the minister also disclosed that Pakistan’s commitments under the IMF programme currently limit the government’s ability to introduce a fully flexible, market-based electricity tariff system. He explained that the government has been in discussions with the IMF for several months regarding the introduction of a time-of-use tariff, under which electricity prices would vary according to the actual cost of power generation at different hours of the day. Such a system, he said, would encourage consumers to shift electricity consumption to off-peak periods, reduce pressure on the national grid and help integrate renewable energy more efficiently.

LAHORE: Pakistan’s automobile industry is witnessing growing divisions over the government’s taxation policy for vehicles, with local manufacturers warning that the current framework unfairly benefits expensive imported and premium new energy vehicles (NEVs) while placing a heavier tax burden on affordable cars purchased by middle-income families. The controversy has intensified following the government’s decision to introduce a range of fiscal incentives for new energy vehicles, including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (REEVs). While the policy is designed to accelerate Pakistan’s transition towards cleaner transportation and reduce reliance on fossil fuels, established local assemblers argue that the incentives are skewed in favour of luxury vehicle buyers instead of promoting affordable green mobility. Industry representatives say the taxation gap between conventional locally assembled vehicles and premium electric vehicles has widened considerably, raising concerns over fairness, competitiveness and the long-term sustainability of Pakistan’s domestic automobile manufacturing sector. According to industry estimates, a locally assembled Suzuki Alto—one of the country’s most affordable passenger vehicles priced at around Rs3 million—bears nearly Rs550,000 in taxes, including sales tax, federal excise duty (FED) and the recently introduced New Energy Vehicle (NEV) levy. In contrast, a premium REEV costing close to Rs10 million reportedly attracts sales tax of only around Rs100,000 while remaining exempt from both the federal excise duty and the NEV levy. The tax disparity has triggered criticism from domestic manufacturers, who argue that the current structure effectively penalises middle-income consumers while offering generous incentives to buyers of high-end imported vehicles. Local Assemblers Raise Concerns Pak Suzuki Motor Company spokesperson Ikhlaq Virk said the taxation framework has created an uneven competitive environment that disadvantages affordable vehicles widely used by Pakistani families. He said entry-level models such as the Alto and Cultus serve as essential transportation for the country’s middle class but receive no meaningful tax relief despite their affordability. Virk further noted that premium hybrid and electric vehicles, valued at nearly Rs10 million or more, continue to enjoy substantial concessions under the government’s clean mobility policy. He also pointed to reports suggesting that the sales tax on certain plug-in hybrid and hybrid electric vehicles could be reduced from 25 percent to 18 percent after changes introduced through the Finance Bill, arguing that such relief would primarily benefit affluent consumers rather than encouraging mass-market adoption. IMF Programme Adds Complexity The debate comes at a time when Pakistan remains under an International Monetary Fund (IMF) programme, which has required the government to increase tax revenues, rationalise subsidies and implement fiscal reforms to stabilise the economy. Against this backdrop, industry stakeholders argue that taxation policies should strike a balance between environmental objectives and economic realities, ensuring that clean energy initiatives do not disproportionately favour a small segment of wealthy consumers. The discussion has also reopened a broader policy debate over whether Pakistan’s green mobility strategy should focus solely on reducing emissions or also safeguard domestic manufacturing, employment and industrial investment. Analysts Call for Balanced Incentives Automobile industry experts believe Pakistan’s transition towards cleaner transportation is necessary, but they stress that government incentives should encourage widespread adoption instead of being concentrated in the luxury vehicle segment. Yousuf M. Farooq, Director Research at Chase Securities, said environmental goals should be pursued alongside industrial development and economic sustainability. He noted that while encouraging cleaner transportation is an important national objective, incentive programmes should also consider vehicle affordability, localisation, environmental benefits and the contribution of manufacturers to Pakistan’s economy. Farooq emphasised the need for a consistent taxation framework across all vehicle categories, including conventional internal combustion engine vehicles, hybrids, plug-in hybrids and range-extended electric vehicles, while maintaining adequate protection for local assembly operations and the domestic auto parts industry. He added that environmental incentives should not undermine the competitiveness of local manufacturers or threaten employment generated by Pakistan’s automotive sector. Local Industry Fears Investment Slowdown Pakistan’s automobile industry has invested billions of rupees over the past three decades in assembly plants, localisation programmes and vendor development. The sector supports hundreds of component manufacturers and provides employment to thousands of skilled workers across the country. Industry stakeholders warn that if imported premium electric vehicles continue to enjoy significantly lower taxation than locally assembled conventional vehicles, future investment in domestic manufacturing could slow, weakening Pakistan’s automotive supply chain and localisation efforts. Manufacturers believe a prolonged imbalance may discourage further expansion by existing assemblers while affecting the viability of local parts suppliers that have developed alongside the country’s automobile industry. Government’s Green Mobility Vision Supporters of the government’s policy argue that Pakistan cannot afford to lag behind the global transition towards electric mobility. Many countries are offering tax incentives, subsidies and policy support to encourage electric vehicle adoption, reduce dependence on imported petroleum products and lower carbon emissions. Pakistan, which spends billions of dollars annually on fuel imports, could also benefit from increased electrification of its transport sector by reducing its import bill and improving environmental sustainability over the long term. However, industry observers believe the core issue is not whether electric vehicles deserve policy support but how those incentives should be structured.