Energy Dependency Evaluation: with special context to Pakistan

Pakistan is heavily relying on energy imports and this huge energy imports bill severely threaten the socio-economic as well as the political landscape of the country. The country needs to control this huge import bill to safeguard its political and economic sovereignty by ensuring energy security. Energy security could be ensured through investments in renewable energy projects, as well as efficient utilization of energy resources. Investments in energy projects are not only a long-term process but also the execution of such projects for Pakistan in the current internal and global economic as well as political scenario became a huge challenge. Therefore, Pakistan is needed to focus on its energy policy and assess the efficiency score of the energy sector in order to identify the short falls/ redundancies in its energy sector variables, for this purpose this study aims to evaluate the Energy Dependency (ED) performance score on the basis of sectorial energy consumption of Pakistan by using data envelopment analysis (DEA). This analysis would be of significant importance not only for Pakistan, but for India energy sector policy makers also. As it would provide a complete road map for efficient utilization of energy consumption at sectorial level. Unless and until we are not asses the sectorial energy consumption performance, we would be failed to bring down the ED level and ensure the energy security. ED is the energy import level upon which an economy relies in order to meet its energy needs. ED is calculated by dividing net imports by the sum of gross inland energy consumption plus bunkers. The data set covers the years between 2003 and 2021, and the energy indicators used in the analysis were taken from the International Energy Agency (IEA) data set. The results of the study show that Pakistan’s energy consumption at the sectorial level is not efficient, and the country’s foremost goal is, to revise its existing energy policies and frame future policies in such a way as to reduce the ED level.