Power capacity rises to 46,605MW

Pakistan's installed electricity generation capacity rose to 46,605 megawatts (MW) during the first nine months of the ongoing financial year 2024-25, adding further strain on consumers due to mounting capacity payments for idle plants that produce no power.

According to the Economic Survey 2024-25 released on Monday, the country's generation capacity grew by 1.6% from 45,888 MW recorded during the same period last year. This increase was primarily attributed to the addition of 2,813 MW through net metering, said the government. However, this expansion has intensified capacity payments, which now stand at Rs2.5 trillion to Rs2.8 trillion annually, burdening consumers who are compelled to pay for plants that remain idle.

In an effort to reduce this financial strain, the government has terminated Power Purchase Agreements (PPAs) with several Independent Power Producers (IPPs) effective October 1, 2024. These include HUB Power, Lalpir Power, Pakgen Power, Rousch Power, Saba Power, and Atlas Power.

The composition of the country's installed capacity by source stands at thermal (55.7%), hydel (24.4%), renewable (12.2%), and nuclear (7.8%). While thermal power remains the dominant source, its share has declined in recent years, reflecting a gradual shift toward indigenous and cleaner energy alternatives. Out of total electricity generation of 90,145 gigawatt-hours (GWh), the share of hydel, nuclear, and renewable energy combined reached 53.7%—a significant move towards more sustainable energy sources.

As of March 2025, the Private Power and Infrastructure Board (PPIB) had facilitated 88 operational IPPs with a cumulative capacity of 20,726 MW. The government's focus on renewable and local energy is further underlined by the fact that 84% of upcoming projects are in the clean energy sector.

Power consumption

Electricity consumption, however, showed a decline. During July-March FY2025, Pakistan's total electricity consumption stood at 80,111 GWh, down 3.6% from 83,109 GWh in the corresponding period of FY2024. This reduction is largely attributed to energy conservation measures, increased power tariffs, the growing use of off-grid solar systems, and sluggish industrial activity.

The household sector accounted for 49.6% (39,728 GWh) of total consumption, up from 47.3% (39,286 GWh) the previous year. This indicates rising residential demand, likely driven by population growth, increased use of electrical appliances, and stable weather patterns.

In contrast, industrial consumption fell to 21,082 GWh from 22,031 GWh, lowering its share from 26.5% to 26.3%. The agriculture sector saw the sharpest drop—a 34.3% decline from 6,951 GWh to 4,566 GWh—reducing its share to 5.7%. This was likely due to changing irrigation practices, rainfall variability, and a shift towards diesel-powered or solar alternatives amid high electricity prices.

The commercial sector posted a slight increase in consumption, rising from 6,776 GWh to 6,898 GWh, lifting its share to 8.6%, reflecting modest improvements in retail and business activities in urban areas.

Oil sector

In the oil sector, total petroleum product consumption reached 13.17 million metric tonnes (MMT) during July-March FY2025, up 7.04% from 12.30 MMT in the same period last year. The transport sector remained the largest consumer, with usage increasing 7.99% to 10.54 MMT, comprising 80% of total demand. This growth reflects improved trade and logistics activity, alongside greater mobility.

Industrial oil consumption fell 7.35% to 755.40 thousand tonnes due to reduced output in energy-intensive industries and fuel-switching to cheaper alternatives such as natural gas. The power sector's petroleum use plummeted 77.68% to just 116.21 thousand tonnes as reliance on furnace oil declined in favour of hydropower, coal—including Thar coal—nuclear energy, and imported LNG.

The domestic sector's petroleum use rose moderately by 7.34%, while the agriculture sector posted a slight decline of 3.35%. The government sector recorded a small increase of 3.27%.

During July-March FY2025, petroleum product imports climbed to 12.53 MMT, up 12.5% in volume, though the import bill remained stable at $8.4 billion due to lower global prices and improved procurement practices. Motor spirit (petrol) imports rose 11.3% in volume but fell 5.1% in value to $3.04 billion, reflecting favourable global prices.

High-Octane Blending Component (HOBC) imports soared more than eightfold to 144.44 thousand tonnes, with the value rising to $108.40 million amid growing demand for premium fuels. High-speed diesel imports also increased 17.4% to 1.45 MMT, though the import bill edged lower to $1.01 billion.

Crude oil imports rose by 8.8% to 6.76 MMT, but costs remained flat at $4.11 billion due to softened global prices. Higher crude imports align with increased domestic refining activity aimed at meeting local fuel demand.

Jet fuel imports almost doubled to 195.67 thousand tonnes, with their value rising to $143.10 million, signalling recovery in domestic and international air travel. A small quantity of aviation gasoline (0.24 thousand tonnes) was imported, not recorded in the previous year.

Gas sector

Domestic natural gas met 29.3% of the country's total primary energy supply in FY2024. The country has a 14,276 km transmission network and over 200,000 km of distribution pipelines serving 10.7 million consumers. To address rising demand, the government is enhancing both local production and imports. Two Floating Storage Regasification Units (FSRUs) currently process 1,200 million cubic feet per day (MMCFD) of RLNG.