Pakistan’s power generation increased 5.1 percent year over year to 14,943 MW in August 2026, according to an analysis by Arif Habib Limited (AHL).
The figure was 1.4 percent above the seven-year average for August, although it remained below the 16,176 MW peak recorded in August 2021.
The recovery in power demand was attributed to lower tariffs, a shift of industrial consumers toward the national grid, higher consumption by industrial and agricultural consumers, and improved economic activity. Large-scale manufacturing also grew 3.0 percent year over year in July 2026.
Power generation exceeded the NEPRA reference level during the month, according to the AHL report, which could support future capacity utilization agreements. Adjusted fuel cost stood at Rs. 8.83 per kWh in August, compared with a reference cost of Rs. 7.10 per kWh.
The higher fuel cost was driven by increased RLNG and furnace oil prices, contributing to a positive fuel cost adjustment sought by distribution companies. The report said DISCOs have sought an FCA of Rs. 1.73 per kWh for August.
Furnace oil-based generation surged 49 percent month over month to 321 GWh in August amid RLNG disruptions and higher summer demand. The report expects NPL, NCPL and NEL to see significant utilization, supporting earnings for companies operating under the hybrid take-and-pay regime.
Meanwhile, LNG-based power generation declined 51.7 percent year over year to 1,052 GWh in August, reflecting a sharp reduction in LNG imports amid geopolitical disruptions. Of seven long-term cargoes originally scheduled for the month, only one was imported by PSO under its long-term contract at 13.37 percent.
Higher international oil prices increased the overall cost of the imported cargo, pushing RLNG fuel cost to Rs. 45.93 per kWh, the second-highest level on record, according to the report. The higher fuel cost also contributed to the increase in the fuel cost adjustment
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