The federal government has imposed a new levy of Rs 238 per million British thermal units (MMBTU) on gas supplied to captive power plants. This move comes as part of the International Monetary Fund’s (IMF) reform conditions aimed at improving Pakistan’s energy sector finances. The government plans to use the revenue generated from this levy to reduce electricity tariffs for consumers across the country.
The levy has been imposed under the Off-The-Grid Captive Power Plants Levy Act 2025. Officials estimate that the new charge could lower electricity prices by about 90 paisa per unit in the initial phase. Moreover, the government has designed a plan to gradually increase this levy by up to 20 percent in the coming months to raise additional funds for the power sector.
The collected levy revenue will be distributed among all categories of electricity users, ensuring tariff reductions benefit domestic, commercial, and industrial consumers alike. Earlier, on February 1, 2025, the gas tariff for captive power plants was raised from Rs 3,000 to Rs 3,500 per MMBTU, and the new levy will be charged on top of this increased rate.
Sources say the government hopes this strategy will help ease the financial burden on the national power system while aligning with IMF guidelines. The step is part of broader energy sector reforms to stabilize power supply, encourage investment, and make electricity more affordable for all Pakistanis.
This new levy signals the government’s commitment to balancing fiscal discipline with consumer relief, addressing Pakistan’s ongoing energy challenges through targeted policy measures. The move is expected to improve transparency and sustainability in the country’s power sector over time.