Electricity Generation Becomes More Expensive in August

Pakistan's power generation rose 5.1 percent year over year to 14, 943 MW in August 2026, according to an analysis by Arif Habib Limited (AHL).

Key points

• Although it remained below the 16, 176 MW peak recorded in August 2021, the figure was 1.4 percent above the seven-year average for August.
• Large-scale manufacturing additionally grew 3.0 percent year over year in July 2026.
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• Furnace oil-based generation surged 49 percent month over month to 321 GWh in August against the backdrop of RLNG disruptions and higher summer demand.
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Although it remained below the 16, 176 MW peak recorded in August 2021, the figure was 1.4 percent above the seven-year average for August. Electricity Could Obtain Cheaper for Small Consumers.

Notably, 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 additionally 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. It could backing 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.

In practice, the higher fuel cost was driven by rose RLNG and furnace oil costs, contributing to a positive fuel cost adjustment sought by distribution firms. The report remarked 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 against the backdrop of RLNG disruptions and higher summer demand. The report expects NPL, NCPL and NEL to see significant utilization, supporting earnings for firms 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 against the backdrop of 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. Fauji Foods CEO Quits.

Higher international oil rates climbed the overall cost of the imported cargo, pushing RLNG fuel cost to Rs. As the report notes, 45.93 per kWh, the second-highest level on record. The higher fuel cost additionally contributed to the rise in the fuel cost adjustment. Stay Connected with ProPakistani.

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Taken together, the developments around electricity Generation Becomes More Expensive in August point to a situation that is still moving, and the coming days should bring more clarity.