Electricity Generation Becomes 14% More Expensive

Pakistan’s average fuel cost of electricity increased 14 percent year on year in June to Rs. 9.0 per unit, mainly because of significantly higher costs for RLNG and furnace oil generation.

Electricity generation declined 2 percent year on year to 13,430 GWh in June 2026, although output recovered 6 percent compared with May, according to data compiled by Topline Research using NEPRA statistics.

On a full year basis, electricity generation reached 128,696 GWh in FY26, up just 1 percent from the previous year, reflecting sluggish growth in electricity demand despite a gradual recovery in economic activity.

One of the biggest shifts during the year was Pakistan’s changing fuel mix. Electricity generated from RLNG fell 33 percent year on year in June and declined 23 percent during FY26 to 17,130 GWh. RLNG’s share in the country’s power mix dropped to 13.3 percent in FY26 from 17.5 percent a year earlier, making it one of the largest declines among major generation sources.

In contrast, imported coal emerged as one of the fastest growing sources of electricity. Power generation from imported coal increased 22 percent in June and surged 52 percent during FY26 to 13,748 GWh, raising its share in the national generation mix from 7.1 percent to 10.7 percent.

Nuclear power also recorded strong growth, with generation rising 30 percent in June and 2 percent during FY26. Nuclear’s contribution to Pakistan’s electricity mix increased to 17.7 percent, strengthening its position as one of the country’s largest low cost baseload power sources.

Hydropower remained the single largest contributor to electricity generation, accounting for nearly 31 percent of total output during FY26, although generation edged down 1 percent from the previous year due to lower water availability.

Renewable energy also posted mixed results. Wind generation increased 17 percent during FY26, while solar generation declined 9 percent despite continued additions of rooftop solar capacity, reflecting seasonal generation patterns and lower utility scale output.

Meanwhile, furnace oil based generation jumped 153 percent during FY26 from a low base, highlighting the system’s continued reliance on expensive backup generation during periods of peak demand.

On an annual basis, the average fuel cost fell 1 percent to Rs. 8.4 per unit in FY26 from Rs. 8.6 per unit in FY25, largely due to greater reliance on lower cost sources such as hydropower, nuclear energy and imported coal.