Can EVs help break Pakistan's dependency on fossil fuel?

The country hopes to increase electric vehicle adoption with its new policy, but a deep dependency on fossil fuels stands in the way, writes Mohammad Bilal for Dialogue Earth

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PAKISTAN imports billions of dollars' worth of oil annually. This has not only kept its foreign reserves under pressure, but also entrenched inflation and worsened urban pollution.

As the country navigates an energy and environmental crisis, experts and activists are asking: Can Pakistan switch gears from polluting vehicles to electric vehicles (EVs) and embrace a cleaner and more sustainable future?

The country has set ambitious goals with its New Energy Vehicle Policy 2025-30 launched in June 2025 to replace the original of 2019. It wants 30 per cent of all new vehicle sales to be electric by 2030, and by 2050, all new vehicles.

Though encouraging on paper, these goals are being held back by policy inconsistency, inadequate EV infrastructure and a slow-moving industrial base. Taking the steps to achieve them in a country structurally dependent on fossil fuels will not be easy.

PAKISTAN’S DEEP RELATIONSHIP WITH PETROL

The transport sector accounted for 80 per cent of Pakistan's total petroleum consumption in 2024-25, up by 8 per cent on the previous year.

The country also imported $15.9 billion worth of petroleum products, according to data from the Pakistan Bureau of Statistics.

This dependence feeds a vicious cycle of trade deficits and currency and inflationary pressure.

But the country’s reliance on fossil fuels also underpins government revenue.

The Petroleum Development Levy (PDL), which acts as a consumption tax on fuel, is expected to bring in PKR1.47 trillion ($5 billion) in fiscal year 2025-2026 - a sharp rise from $3.95 billion the previous year.

This comes after the government removed all restrictions on where it can set the levy, which was previously capped at $0.238.

The new budget has also introduced a carbon levy of $0.0085 per litre, which is expected to double next year.