KARACHI: The country’s power generation declined by 3.7 percent to 9,886 GWh in the month of October this fiscal year compared to 10,262 GWh in the same month of the previous fiscal year.
On a monthly basis, electricity generation declined sequentially, falling by 21.5 percent, reflecting seasonal effects. During the first four months of this financial year, production totaled 50,819 GWh, stable compared to the previous year.
Analysts attributed the fall in electricity production in October to the increase in distributed generation. “However, this happened despite tariffs falling and captive consumers moving to the network after the captive tax,” said Zayan Babar Khan, an analyst at Arif Habib Limited.
He noted that the impact of terminations and renegotiations of power purchase agreements (PPAs) had already been felt through quarterly tariff adjustments (QTAs), with Nepra approving a negative QTA of Rs 1.89/kWh for the fourth quarter of FY25, implemented in August, September and October 2025. “QTAs are expected to normalize next month, which should result in marginally higher tariffs,” he added.
The adjusted fuel cost during the month stood at Rs8.72/kWh, lower than the benchmark cost of Rs9.37/kWh. Therefore, the DISCOs requested a negative FCA of Rs0.37/kWh, mainly due to lower than expected oil prices and lower share of FO and imported coal in the generation mix compared to Nepra’s baseline assumptions.
Zayan noted that falling prices of imported coal also supported the negative adjustment. Nepra had assumed Brent to be $73/barrel, while actual prices averaged $64/barrel in October 2025. The cost of production based on imported coal fell to Rs 14.39/kWh, down 14.9% year-on-year, as coal prices fell. The cost gap with Thar coal has narrowed to Rs 1.29/kWh, compared to the historical difference of Rs 4/kWh.
Production from Hydel and RLNG exceeded the NEPRA benchmark, while nuclear, Thar coal and imported coal production fell short of forecasts. Data showed that Hydel’s output fell 15.1% year-on-year to 2,705 GWh in October 2025 due to lower flows, although Nepra had already accounted for this. Production was 2.9% above baseline, which had no impact on fuel costs or FCA.
RLNG-based generation fell 2.7 percent year-on-year to 1,949 GWh during the month, but remained 6.6 percent above the October benchmark target, increasing fuel costs, although partially offset by lower oil prices.
Imported coal production fell 48.4 percent year-on-year to 466 GWh during the month and also remained 30.4 percent below Nepra’s benchmark, likely due to higher system stresses during the winter season.
In October 2025, electricity production was 8.7 percent below the benchmark of 10,828 GWh, with a worrying surplus of 942 GWh despite falling tariffs and the shift of captive consumers to the grid.
Zayan forecast that power generation in November is expected to decline due to seasonal factors, including lower temperatures. “Hydel production may remain constrained this year due to reduced water flows, which would lead to higher fuel cost and hence positive FCAs,” he said, adding that Nepra expects power demand to increase by 2.8% year-on-year in FY26.
