Pakistan's power generation slumps 10% in April

May 20, 2026 (MLN): Pakistan's power generation took a sharp hit in April 2026, falling 9.6% year-on-year to 9,499 GWh from 10,513 GWh in the same month last year, as supply disruptions, austerity-driven demand suppression, and the rapid rise of distributed solar generation weighed heavily on the national grid.

Despite the monthly dip, the cumulative picture for the first ten months of FY26 remains modestly positive, with total generation reaching 102,630 GWh, a 2% increase over the same period last year.

On a month-on-month basis, output did recover 6.3%, largely reflecting seasonal patterns, according to data compiled by Arif Habib Limited.

The most dramatic shift in April's generation mix came from RLNG-based plants, which saw output collapse 82.4% year-on-year to just 380 GWh.

The culprit: supply disruptions stemming from the ongoing US–Iran conflict, which left Pakistan without a single LNG cargo in April against six that had been scheduled.

To plug the gap, the system leaned heavily on fuel oil and high-speed diesel. FO-based generation surged roughly six times year-on-year to 486 GWh, while HSD-based plants were dispatched for the first time since January 2024 though their contribution remained marginal at just 0.5% of the total generation mix.

Imported coal stepped in more meaningfully, jumping 1.3 times year-on-year to 1,343 GWh, with CPHGC and LEPCL driving the increase.

The fuel switch came at a cost. The adjusted fuel cost for April clocked in at RS9.97/KWh, well above the NEPRA reference cost of RS8.25/KWh.

As a result, power distribution companies (DISCOs) have filed for a positive Fuel Cost Adjustment (FCA) of RS1.73/KWh for the month, a charge that will ultimately be passed on to consumers.

Not all segments underperformed. Nuclear generation rose 11.4% year-on-year to 2,097 GWh, buoyed by higher output from the K-3 power plant. Hydel generation, however, declined 9.8% to 2,079 GWh amid lower output from WAPDA facilities.

Source(s): NEPRA, AHL Research

What makes April's numbers particularly concerning is that generation remained below NEPRA's reference levels even as several demand-stimulating factors were in play  including lower industrial tariffs (down Rs4/KWh), incentive packages for industrial and agricultural consumers, higher levies on captive gas users, and improving broader economic activity, with Large-Scale Manufacturing up 6.5% year-on-year in the first nine months of FY26.

The shortfall is attributed to a combination of government-led austerity measures dampening consumption, increased load shedding triggered by the RLNG supply squeeze, and the ongoing rise of rooftop and distributed solar generation pulling demand away from the grid.

The consequence of persistently below-reference generation is likely to be higher Quarterly Tariff Adjustments (QTAs) going forward  another potential burden on end consumers.

The trajectory heading into April had actually been encouraging. Generation trends from December 2025 through March 2026 had pointed to improving grid stability and a stronger QTA outlook. That momentum now appears at risk.

If the US–Iran conflict prolongs RLNG supply disruptions, Pakistan faces a difficult trilemma: absorb higher fuel costs through elevated FCAs and tariffs, accept increased load shedding, or watch demand erode further all of which would weigh on the sector's earnings and growth outlook.

NEPRA currently projects power demand growth of just 1% year-on-year, a figure that April's data suggests may prove optimistic if structural headwinds are not addressed.

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