ISLAMABAD – The federal government has decided to provide further relief to electricity consumers by implementing the Captive Power Levy, as per the conditions set by the International Monetary Fund (IMF).
The collected amount from this levy will be used to reduce electricity tariffs on a monthly basis.
Reports claimed that as the rate of the Captive Power Levy increases, more relief will be provided to consumers in terms of lower electricity costs. The federal cabinet has already approved the plan to pass on the benefits of the Captive Power Levy to electricity users.
The collected levy will be applied to reduce tariffs every two months, rather than monthly. The government has introduced a plan to impose a levy of up to 20% on captive power plants in different phases.
Initially, a 5% levy will be imposed and it will be increased to 15% in February and 20% in August 2026. The funds raised will be used to lower electricity rates for all categories of power consumers.
In case of non-payment of the levy, actions will be taken against captive power plants, and in case of consistent default, gas supply to the concerned plants will be cut off. Each captive power plant will be required to pay the levy to the federal government based on its use of gas or LNG.
