Pakistan power generation falls 9.6% in April

Pakistan’s power generation fell 9.6% year-on-year in April 2026 to 9,499 GWh, according to an Arif Habib Limited report based on Nepra data. RLNG and hydel output declined sharply, while greater use of furnace oil and imported coal pushed up generation costs. ISLAMABAD: Pakistan’s electricity generation fell 9.6% year-on-year in April 2026 as weaker demand, disruptions in re-gasified liquefied natural gas (RLNG) supplies and lower hydel output altered the generation mix and raised costs, according to a report by Arif Habib Limited based on data from the National Electric Power Regulatory Authority. The report said total power generation stood at 9,499 gigawatt-hours in April, down from 10,513 GWh in the same month last year. On a month-on-month basis, generation was also lower by 6.3%. Output remained below 10,000 GWh, while the year-on-year trend stayed negative after modest improvement in February and March. According to the report, lower generation reflected austerity measures that curbed consumption, increased load-shedding linked to RLNG disruptions and a rise in distributed generation. It added that despite lower tariffs, industrial demand had shifted to the national grid, with industrial sales rising 6.5% year-on-year in the first nine months of FY26. Fuel cost rises above reference level The average fuel cost in April was recorded at Rs9.97 per kilowatt-hour, compared with a reference cost of Rs8.25 per unit. As a result, power distribution companies sought a positive fuel cost adjustment of Rs1.73 per kilowatt-hour for April. The report said the higher adjustment was driven by greater dependence on furnace oil and high-speed diesel generation, along with elevated fuel prices. Furnace oil-based generation jumped six times from a year earlier to 486 GWh because of RLNG supply disruptions. It added that higher utilisation of plants run by Hub Power, Nishat Power, Nishat Chunian Power and Lalpir Power supported earnings for companies operating under hybrid take-and-pay arrangements. High-speed diesel-based plants were dispatched for the first time since January 2024, although they accounted for only 0.5% of the generation mix. Sharp fall in RLNG generation RLNG-based generation dropped 82.4% year-on-year to 380 GWh in April. The report linked the decline to supply disruptions associated with the US-Iran conflict, which affected fuel availability. It said no cargoes were reportedly diverted during the period despite the lower output. Hydel generation decreased 9.8% year-on-year to 2,079 GWh, mainly because of reduced production from Wapda power stations. In contrast, nuclear generation increased 11.4% to 2,097 GWh, supported by higher output from the K-3 plant. Imported coal-based generation rose 1.3 times year-on-year to 1,343 GWh, offsetting part of the decline in RLNG and hydel output. The increase was largely attributed to higher dispatch from China Power Hub Generation Company, a CPEC energy project based on imported coal, and Lucky Electric Power Company. Generation mix shifts toward coal and furnace oil According to the April 2026 generation mix, hydel and nuclear each contributed 22% of total electricity generation, making them the largest sources during the month. Local coal accounted for 16%, while imported coal made up 14%, indicating greater reliance on coal-fired plants amid RLNG shortages. Gas-based generation represented 10% of the mix. RLNG’s share fell sharply to 4% in April 2026 from 21% in April 2025, underscoring the impact of supply disruptions. Furnace oil contributed 5%, compared with 1% a year earlier, while wind maintained a 4% share. Solar, bagasse and imported electricity each contributed 1%. Outlook and risks AHL analyst Zayan Babar said generation trends from December 2025 to March 2026 pointed to improving grid stability and a better outlook for quarterly tariff adjustments, which had earlier come under pressure from rising solar adoption and weaker demand. The report said lower industrial tariffs, including a reduction of Rs4 per kilowatt-hour, incentive packages and higher levies on captive gas consumption were expected to support additional grid demand in the coming months. However, it noted that risks persisted because of geopolitical tensions and uncertainty surrounding RLNG supplies.