The federal government has announced a plan to provide additional relief to electricity consumers by implementing the Captive Power Levy, in line with conditions set by the International Monetary Fund (IMF). The levy is aimed at lowering electricity costs for consumers across Pakistan.
Under the plan, the funds collected from the levy will be used to reduce electricity tariffs every two months. Reports indicate that as the rate of the Captive Power Levy increases, greater relief will be passed on to consumers through lower electricity bills. The federal cabinet has already approved the initiative to ensure benefits reach electricity users.
The levy will be imposed in phases on captive power plants. Initially, a 5% levy will be applied, which will increase to 15% in February 2026 and 20% in August 2026. The collected funds will be distributed to reduce tariffs for all categories of power consumers, providing financial relief amid rising energy costs.
Authorities have clarified that captive power plants failing to pay the levy will face strict action. Continuous default could lead to the disconnection of gas supply to the concerned plants. Each plant will be required to pay the levy based on its consumption of gas or LNG.
Officials emphasized that the levy is part of a broader strategy to ensure sustainable energy pricing while complying with IMF conditions. The phased approach aims to balance revenue collection from power producers with tangible benefits for electricity consumers.
