Pakistan's power generation slips marginally in May

June 17, 2026 (MLN): Pakistan's power generation edged down 0.9% year-on-year to 12,638 GWh in May 2026, from 12,755 GWh in the corresponding month last year.

On a month-on-month basis, however, generation posted a 33% improvement, reflecting seasonal demand trends, according to an Arif Habib Limited (AHL) report.

For the first eleven months of FY26 (11MFY26), cumulative generation reached 115,268 GWh, up 1.6% YoY.

Despite several demand-supportive factors including lower tariffs, an industrial shift to the national grid, incremental consumption packages for industrial and agricultural users, and improving economic activity (LSM up 6.4% YoY in 10MFY26)  power generation continued to fall short of NEPRA reference levels.

AHL attributed this to government-led austerity measures dampening consumption, increased load shedding resulting from RLNG supply disruptions, and the growing uptake of distributed generation.

The shortfall against reference levels raises the likelihood of higher Quarterly Tariff Adjustments (QTAs) in the months ahead.

On the cost side, the adjusted fuel cost for May 2026 came in at RS9.25/KWh, exceeding the reference cost of RS8.43/KWh.

As a result, DISCOs have filed for a positive Fuel Cost Adjustment (FCA) of RS0.82/kWh for May 2026, driven chiefly by reduced hydel generation, greater dependence on imported coal, and elevated oil prices.

RLNG-based generation fell 31.1% YoY to 1,493 GWh, though it staged a sharp 3.9x MoM recovery.

The rebound came on the back of three RLNG cargo imports by PSO under long-term contracts at a slope of 10.2%, as well as one spot cargo by PLL at a slope of 20.9% to the DES price  contrasting with zero cargo imports recorded in April 2026.

On a YoY basis, however, generation remained suppressed as only four cargoes were received against the eight originally scheduled for May 2026.

Hydel generation contracted 13.2% YoY to 4,205 GWh, weighed down by lower-than-usual water flows and a demanding base effect May 2025 had posted the highest-ever monthly hydel output on record.

Even so, May 2026 hydel generation held above long-term historical averages.

Imported coal-based generation surged 2.2x YoY to 1,343 GWh, broadly offsetting the shortfalls in RLNG, hydel, and nuclear generation, the last of which declined 10.5% YoY.

Furnace oil (FO)-based generation collapsed 96% MoM to a mere 20 GWh in May 2026, as the combination of stronger hydel output, a recovering RLNG supply, and higher imported coal generation was sufficient to meet seasonal electricity demand without recourse to expensive FO-based capacity.

AHL noted that generation trends between December 2025 and March 2026 had reflected improving grid stability and a more constructive QTA outlook, underpinned by lower industrial tariffs (down RS4/kWh), demand-side incentive packages, and higher levies on captive gas.

The weaker demand readings in April and May 2026, however, present a near-term risk to this trajectory.

The following table details source-wise power generation for May 2026:

Source: NEPRA, AHL Research

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