Power generation falls 9.6% on RLNG, hydel dip

Pakistan's power generation fell 9.6% year?on?year in April 2026, as lower electricity demand, RLNG supply disruptions and reduced hydel output weighed on the energy mix, while higher reliance on furnace oil (FO) and imported coal pushed up generation costs.

Total generation dropped to 9,499 GWh in April from 10,513 GWh a year earlier, also declining 6.3% month?on?month, according to a report by Arif Habib Limited (AHL) based on Nepra data. Output remained below 10,000 GWh, with the year?on?year trend staying negative after modest improvements in February and March.

The report attributed lower generation to austerity measures suppressing consumption, increased load?shedding due to RLNG disruptions, and rising distributed generation. Despite lower tariffs, industrial demand shifted to the grid, with industrial sales rising 6.5% year?on?year during the first nine months of FY26.

Average fuel cost in April stood at Rs9.97/kWh, exceeding the reference cost of Rs8.25/kWh, pushing distribution companies to seek a positive fuel cost adjustment of Rs1.73/kWh for April. The higher adjustment was driven by increased reliance on furnace oil and high?speed diesel generation along with elevated fuel prices.

Furnace oil?based generation surged six?fold year?on?year to 486 GWh because of RLNG disruptions. Higher utilisation of plants operated by Hub Power, Nishat Power, Nishat Chunian Power and Lalpir Power supported earnings for companies operating under hybrid take?and?pay arrangements. HSD?based plants were dispatched for the first time since January 2024, though they contributed only 0.5% of the generation mix.

RLNG?based generation plunged 82.4% year?on?year to 380 GWh in April as supply disruptions linked to the US?Iran conflict affected fuel availability. No cargoes were reportedly diverted during the period despite the lower output.

Hydel generation fell 9.8% year?on?year to 2,079 GWh, mainly due to reduced output from Wapda power stations. In contrast, nuclear generation rose 11.4% to 2,097 GWh, supported by higher production from the K?3 plant.

Imported coal?based generation surged 1.3 times year?on?year to 1,343 GWh, offsetting part of the decline in RLNG and hydel output. The increase was largely driven by higher dispatch from CPHGC, a CPEC energy project based on imported coal, and Lucky Electric Power Company.

According to the April 2026 generation mix, hydel and nuclear each accounted for 22% of total electricity generation, making them the largest contributors during the month. Local coal contributed 16%, while imported coal accounted for 14%, reflecting increased dependence on coal?fired plants amid RLNG shortages. Gas?based generation made up 10% of the mix. RLNG's share dropped sharply to 4% in April 2026 from 21% in April 2025, highlighting the impact of supply disruptions. Furnace oil contributed 5%, compared with just 1% a year earlier, while wind power maintained a 4% share. Solar, bagasse and imported electricity each contributed 1%, indicating limited reliance on these sources during the month.

AHL Analyst Zayan Babar noted that generation trends between December 2025 and March 2026 indicated improving grid stability and a stronger outlook for quarterly tariff adjustments, which had previously been pressured by rising solar adoption and weaker demand.

Lower industrial tariffs, including a reduction of Rs4/kWh, incentive packages, and higher levies on captive gas consumption are expected to support additional grid demand in the coming months. However, risks remain due to geopolitical tensions and RLNG supply uncertainties.