Abstract Pakistan is facing severe energy crisis in spite of the fact that nature has blessed her with huge energy potential. Short fall of electricity supply in the country is increasing and has been recorded up to 4522 MW in 2010. This deficit reached to 7000 MW in May, 2011. A comprehensive review of Pakistan's energy sector is presented in this paper. Energy potential, major issues of energy sector and energy import options are discussed. Issues like poor management, combined cycle capacity, low hydro power share, circular debt and energy security have been covered. Energy potential assessment includes hydro solar, wind, coal, nuclear, hydrogen cells, geo-thermal, ocean resources and bio mass. Future prediction calculations are based upon country's current and world's average per capita energy consumption. Current oil and gas reserves of the country contribute to only 5 percent and 48.8 percent of the energy mix and at the current rate will be exhausted by 13 and 16 years respectively. The overwhelming dependence of the energy sector on imported fossil fuels may create a situation of energy security threat. However dependence upon the energy import options cannot be avoided in order to lessen the severity of energy crisis in near future. Some of the energy import options are: Turkmanistan, Afghanistan, Pakistan and India (TAPI); Iran, Pakistan and India (IPI) gas pipelines; Liquefied Natural Gas (LNG) from Qatar etc. On the other hand exploitation of vast renewable potential like hydro, solar and wind requires serious attention. Exploitation of indigenous coal resources would also be a key for solving energy crisis in the long run. In summary, this paper presents energy potential assessment in context of major issues, future predictions and impact of energy import options. This in turn provides a big, clear and brighter picture of the country's energy sector.