Economics of Energy Pakistan is in a record economic transition since 1999. The GDP grow with the average rate of over 7.5 percent during last four years while we expect GDP growth rate would be 6.2 percent for current financial year. Even though this growth is backed by boom in service sector, it is imperative that sustainable growth in GDP would be achieved by the process of continuous industrialization and energy is the most essential element to push this process forward. Thus Pakistan is currently in need of energy resources and its growing demand in the country is putting widening pressure on the deficit. Pakistan’s total energy consumption has increased by 37 percent to 36MTOE in FY07 from 26.3MTOE FY03 which is indicting the growing energy needs of the country during last four years. As a matter of fact, Oil & Gas are two main dominant sources of the energy for Pakistan’s industrial segment and presently cater 70.2 percent of the total energy needs of the country. Other than these two remaining is covered by hydroelectricity which contributes for 16.2 percent, coal 10.6 percent and LPG 1.8 percent of the total energy demand. It is noteworthy here that shares of hydroelectricity and coal are low, despite the country’s large hydropower potential and substantial coal deposits which have been discovered at Thar in the province of Sindh. Under present state of high international oil prices, it is definitely a desirable option to diversify the sources of supply, so as to reduce oil portion from the energy mix and alternatively acquire energy from coal and hydroelectricity. This will provide not only strategic bene-fits in terms of fuel substitution but also help ease the heavy import burden on economy. In fact, during the last four years, we ...