In early 2002 Pakistan had crude oil reserves estimated at 298 million barrels (chiefly at the Meyal oil field, near Rawalpindi) and large natural gas reserves of 611 billion cu m (mainly at Sui, Baluchistan). In the early and mid-1980s, accelerated exploitation of these resources reduced the nation's oil imports and improved its trade balance. Crude oil production peaked in 1991 at 62,000 barrels per day.

Oil, about two-thirds of which is imported, satisfies about 43.5% of primary energy needs, natural gas (38.3%), coal (5.1%), while the remainder is met by hydroelectricity and nuclear power. Energy production in 2001 included petroleum, 57,000 barrels per day; natural gas, 22.6 billion cu m (798 billion cu ft); and coal, 3.8 million tons. Electricity generation in 2000 totaled 64.1 billion kWh, of which 64.1% came from thermal plants, 35.3% from hydroelectric sources, and less than 1% from nuclear power. Consumption of electricity in 2000 was 7.5 billion kWh. Installed electrical generating capacity in 2001 was 17,726,000 kW.

Two factors have contributed to the growth of the electric power sector: the initial harnessing of the vast hydroelectric potential of the Indus basin (estimated at 25,000 MW) and the increased availability of natural gas as a fuel for thermal generators. The Tarbela Dam, the world's largest earth- and rock-filled dam, completed in 1976 at a cost of $1.1 billion, generates2.1 million kW of hydroelectric power. Pakistan's nuclear plant at Karāchi has a single 137 MW reactor that began commercial operation in 1972.

Despite increases in installed generating capacity, Pakistan faces chronic electricity shortages due to rapid demand growth, transmission losses due to outdated infrastructure, power theft, and seasonal reductions in the availability of hydropower. Rotating power outages are common and many villages are not yet electrified. As of 2002, less than half of Pakistan's population was connected to the nation's power grid. Since 1947, the government has given the highest priority to development of the industrial sector, and by 2002 had developed a fairly broad industrial base. In 2000/01 industry accounted for 25.2% of GDP, of which 17.4% was from manufacturing; 3.9% from electricity and gas utilities; 3.4% from construction and0.5% from mining. Industry employs about 17% of the work force (1999 est.)