The total cost of power generation surged 57 percent to Rs10.06/KWh in August 2022 from Rs6.41/kWh in the same month last year, mostly owing to increasing fuel prices, the latest numbers showed on Saturday.
However, the generation cost eased by 6 percent month-on-month.
Arif Habib Limited (AHL) attributed the month-on-month decrease in fuel cost to a rise in hydel and solar-based power generation.
“In addition, month-on-month, RLNG, nuclear and furnace oil-based costs of generation fell 12.6 percent, 2.8 percent, and 0.2 percent, respectively,” the brokerage said in a note.
The country’s power generation dropped 12.6 percent year on year to 14,053 GWh (18,888 MW) in August 2022, compared to 16,078 GWh (21,610 MW) in the same month a year ago.
The year-on-year fall in power generation was led by furnace oil (1,021 GWh), and RLNG (1,756GWh), down 37.2 percent and 39.4 percent, respectively.
The power generation from hydel and coal sources clocked in at 5,354 GWh and 2,163 GWh, respectively, declining 4.3 percent and 5.7 percent year-on-year, respectively.
Month-on-month, generation also eased by 0.7 percent. During 2MFY23, power generation fell 11.2 percent year-on-year to 28,203 GWh (18,954 MW) compared to 31,758 GWh (21,343 MW) in the same period of the last fiscal year.
In August, hydel was the top source of power generation, accounting for 38.1 percent of the generation mix.
Whereas, power generation from coal improved to 15.4 percent, while nuclear power emerged as the third leading source of generation with 13.3 percent generation in the month under review.
The cost of power production in Pakistan is growing in tandem with skyrocketing fuel prices.
Since the start of the war in Ukraine, Europe’s LNG imports have ballooned to record levels.
Spiking gas prices in Europe led to severe shortages in dollar-strapped developing countries.
Recently on the Asian spot market, LNG prices were recorded ten times higher in August than the average rates for the season, in spite of the fact they normally peak in winter.
The cost of LNG was on the rise even before the Ukraine war because of high demand in the post-Covid recovery period. Pakistan largely depends on imported fuel and its fuel import bill swelled to $23 billion in FY2022 compared to FY2021.