Pakistan’s power generation increased 5.1 percent year-on-year to 14,943 MW in August 2026, according to an analysis by Arif Habib Limited based on data from the National Electric Power Regulatory Authority (NEPRA).
August’s generation was 1.4 percent higher than the seven-year average for the month but remained below the 16,176 MW peak recorded in August 2021.
The increase in demand was linked to lower electricity tariffs, industrial consumers shifting back to the national grid, higher industrial and agricultural consumption, and improving economic activity. Large-scale manufacturing also grew 3.0 percent year-on-year in July 2026.
According to the report, power generation exceeded NEPRA’s reference level during August, which could support future capacity utilization under existing agreements.
However, the cost of generating electricity increased sharply. Adjusted fuel cost reached Rs. 8.83 per kilowatt-hour (kWh), compared with the reference cost of Rs. 7.10 per kWh.
The increase was mainly driven by higher RLNG and furnace oil prices. Distribution companies have sought a Fuel Cost Adjustment (FCA) of Rs. 1.73 per kWh for August.
Furnace oil-based generation jumped 49 percent month-on-month to 321 GWh as RLNG supply disruptions coincided with higher summer demand.
The report expects Nishat Power Limited (NPL), Nishat Chunian Power Limited (NCPL), and Nishat Energy Limited (NEL) to record higher utilization, potentially supporting the earnings of companies operating under hybrid take-or-pay arrangements.
Meanwhile, LNG-based power generation fell 51.7 percent year-on-year to 1,052 GWh in August as LNG imports declined amid geopolitical disruptions.
Of the seven long-term LNG cargoes scheduled for the month, Pakistan State Oil (PSO) imported only one under its long-term contract at 13.37 percent.
Higher international oil prices also increased the cost of the imported cargo. As a result, RLNG fuel cost reached Rs. 45.93 per kWh, the second-highest level on record, according to the report.
The higher fuel cost is expected to add further pressure through the fuel cost adjustment.
