Power generation drops 2.4% in Jan amid rising fuel costs

Pakistan’s power generation dropped by 2.4% to 8,314 Gigawatt hours (GWh) in January 2024 due to low demand in the system during the winter month. However, the cost of the fuel component in the overall production surprisingly surged by 23% to Rs13.79 per unit due to increased reliance on expensive fuels like imported gas, furnace oil, and diesel. According to data compiled by Arif Habib Limited, electricity generation decreased by 2.4% in the month under review compared to 8,515 GWh in January 2023. Despite the low demand in the system, Pakistan increased generation from expensive fuel-run power plants after generation from comparatively low-cost powerhouses declined, including nuclear plants, local coal-fired plants, and local gas-run plants. Production from the cheapest hydropower plants increased on a year-on-year basis but remained relatively low in the month.