Do you think the word Paki is ALWAYS offensive?

It’s weird this one, I have lots of friends who refer to themselves as a Paki, and they explain it in the way that they are from Pakistani origin and Paki is the same as saying that person is a Scot (British but from Scotland), the Scot thing is relevant because I can’t imagine a Scot being offended by being referred to as a Scot.

Now I know that Paki has been used as an offensive word and I would never use it in an offensive way, or with someone I didn’t know, but I do feel okay using it with my close Pakistani friends.