Pakistan power generation rises 5% YoY as fuel costs climb 38%

Pakistan’s power generation grew by 5.1% year-over-year in August 2026, reaching 14,943 GWh. This increase is attributed to improved economic activity, lower tariffs, and increased consumption from industrial and agricultural sectors. Hydel power emerged as the primary energy source, accounting for 38% of the generation mix with 5,654 GWh produced, marking the second-highest August output on record.

Despite the rise in generation, the total cost of producing electricity increased by 38% year-over-year, reaching Rs10.01 per kWh. This surge was driven by higher prices for furnace oil and Reconstituted Liquefied Natural Gas (RLNG), as well as a shift in the fuel mix. RLNG-based generation fell by 51.7% year-over-year due to geopolitical disruptions and reduced imports. Consequently, distribution companies (DISCOs) have sought a Fuel Cost Adjustment (FCA) of Rs1.73 per kWh to manage these rising expenses.