MediumVI Energy Politics & Supply Security15 October 2026, Thursday
Pakistan uses load-shedding to cap September's power fuel adjustment
The Power Division of Pakistan's energy ministry said on 15 October that the fuel price adjustment for September would be Rs2.56 per kilowatt-hour. The adjustment will add about Rs32.7bn to November bills.
Dawn and The Express Tribune reported on 15 October that the September adjustment is Rs1.45 higher than August's Rs1.11. The ministry said it had imposed targeted load-shedding of about 2–2.5 hours a day in September. Load-shedding, or scheduled power cuts, reduced reliance on expensive furnace-oil and diesel plants. According to the ministry, this averted up to Rs3.44 per unit in additional charges; otherwise the increase would have been Rs5–6. Supplying imported liquefied natural gas to power plants at the domestic gas price cut the burden by Rs0.83 per unit.
The Express Tribune said Brent had risen above $120 with the closure of the Strait of Hormuz, while the base tariff assumed about $70. With Qatar having declared force majeure, Pakistan is meeting its LNG needs through contracted deliveries and extra spot cargoes. Over January–August, the combined effect of fuel and quarterly adjustments was Rs0.65 per unit, or 1.9% of the base tariff. According to Dawn, industrial consumers say the Rs22.96 marginal price in the incremental consumption package is below the true marginal cost of Rs34. That gap adds about Rs11 per unit to the average tariff. From 16 October the government cut petrol by Rs3.63 a litre to Rs390.23 and raised diesel by Rs0.31 to Rs396.96.
Talay assessment
Bottom line
Pakistan is holding down electricity prices by cutting supply. Load-shedding of 2–2.5 hours a day removes Rs3.44 per unit of extra cost from bills and shifts it onto output and households. With Brent far above the $70 assumed in the base tariff, this amounts to a hidden demand constraint. Until Qatari LNG returns, the trade-off between power cuts and price rises will persist. The most likely path is load-shedding continuing through the winter.
Likely effects
- Industrial outputNegativeWeeks
Daily cuts of 2–2.5 hours and a true marginal cost of Rs34 are raising production losses and costs for export industries.
- InflationNegativeWeeks
The Rs32.7bn added to November bills raises household energy spending and puts second-round pressure on prices.
- Energy supply securityNegative1–6 months
While Qatar's force majeure lasts, spot LNG purchases enlarge foreign-currency needs and make power supply price-sensitive.
Possibilities, ranked
- 1Cuts persist, adjustment stays moderate60%
The government carries load-shedding into winter and keeps fuel adjustments below Rs3 per unit.
Watch: The October fuel adjustment being announced below Rs3 per unit
- 2Cuts ease, adjustment rises25%
Under industrial pressure load-shedding is reduced, furnace-oil use rises and the adjustment approaches Rs5 per unit.
Watch: The Power Division announcing fewer hours of load-shedding
- 3Qatari LNG returns15%
Qatari shipments resume, the need for spot purchases falls and the fuel adjustment eases.
Watch: QatarEnergy announcing that force majeure has been lifted
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- September fuel adjustment▲ Rs2.56/kWh
- November bill burden▲ Rs32.7bn