Pakistan’s Power Consumption to Fall Again, First Consecutive Annual Decrease in 16 Years

Hub Power Company Limited (PSX: HUBC) expects Pakistan’s power consumption to decline again this year due to increased tariffs and below-par industrial activity, Reuters reported. HUBC’s Chief Financial Officer Muhammad Saqib said at the Energy Summit 2024 conference in Karachi that industrial growth is stagnant due to rising tariffs, which has impacted power usage. The decline in power consumption holds significant implications for Pakistan’s economy. Saqib emphasized that the inadequate upgrades to Pakistan’s power grid contribute to inefficient supply patterns and lead to the use of expensive furnace oil instead of cheaper alternatives like natural gas. Efforts to curb furnace oil utility for power generation and increase natural gas-fired electricity production face hurdles due to grid limitations. This will likely limit coal-fired power generation and coal imports in the coming year. HUBC estimates that its own power plants will require less imported coal than their full capacity demands due to grid constraints. Data from energy think tank Ember revealed that power demand in Pakistan fell significantly last year, and if this trend continues in 2024, it would be the first consecutive annual decrease in electricity usage in 16 years.