Distributed Generation (DG) systems are typically interfaced with distribution lines by modern power converter devices, which their controllers and dynamic behaviours are significantly influenced by unbalanced grid faults. The active and reactive power control with positive-negative sequences (PNS) is one of fundamental of power converter control under grid fault conditions. This paper proposes a reference current generator (RCG) based flexible power control strategy to enable regulation of active and reactive power with minimizing active and reactive power oscillations. Current limitation control is embedded into the RCG in order to keep maximum current injection in safety limitation for overcurrent protection under grid faults and harmonic distortions. The proposed control strategy has been also accomplished maximum active power and minimum reactive power transfer capability to electric grid. The analytical expression of active and reactive power oscillations depending on flexible control parameters are comprehensively investigated as theoretically and examined with simulations. Fractional order proportional integral (FOPI) controller is preferred to minimise steady state error of AC current regulation and provide faster processing time instead of conventional PI and proportional resonant (PR) controllers. An important contribution for similar previous studies is that PNS voltage and current components are separated by dual average filter based phase locked loop (DAPLL) which is firstly proposed in this paper. The performance of proposed controller is compared with multiple complex-coefficients filter (MCCF-PLL) based controller. Theoretical analysis and simulation results verify the correctness and effectiveness of the proposed solution.