Pakistan’s electricity generation rose 0.8% year-on-year in September 2025 to 12,592 gigawatt-hours (GWh), compared with 12,487 GWh in the same month last year, according to the latest data compiled by Arif Habib Limited (AHL).
During the first quarter of FY26, total generation increased 1% to 40,933 GWh from the corresponding period of the previous year. However, on a month-on-month basis, output declined 11.4% due to seasonal demand reduction.
AHL report attributed the annual growth in September’s generation to lower tariffs, a shift of captive power users to the national grid after new levies, and a low base from September 2024, which recorded the weakest output for that month since 2017.
The average fuel cost for September was Rs7.29 per kilowatt-hour (kWh), below Nepra’s reference rate of Rs7.66 per kWh. Consequently, distribution companies (DISCOs) have requested a negative fuel cost adjustment (FCA) of Rs0.37 per kWh, driven by lower oil prices and a reduced share of furnace oil in power generation.
Nepra had estimated Brent crude at $73 per barrel, while the actual average was $68. The cost of imported coal-based generation dropped 17.2% year-on-year to Rs13.74 per kWh, narrowing the cost difference with Thar coal to Rs0.74 per kWh from a historical gap of around Rs4.
Hydel generation fell 1.1% year-on-year to 4,823 GWh, while RLNG-based output declined 11% to 1,815 GWh. Despite this, RLNG generation remained 12.9% above Nepra’s reference target, partially offsetting the decline in hydel supply.
Imported coal-based generation decreased 11.3% year-on-year to 1,019 GWh but stood 72% higher than Nepra’s reference, supported by lower imported fuel prices. Overall, September’s total generation was 5.3% below the reference level of 13,300 GWh.
The report projected a further decline in power generation during October due to lower temperatures and reduced hydel output. Nepra expects electricity demand to rise 2.8% in FY26, with increased dependence on costlier fuels likely leading to positive FCAs in the coming months.
