Govt Imposes Captive Power Levy Under IMF Condition; Financial Benefit to Go to Consumers

PAKISTAN

The federal government has reportedly imposed a levy on captive power plants in line with conditions set by the International Monetary Fund (IMF), a move officials quoted by a digital TV channel’s website say will pave the way for reducing electricity tariffs for consumers across Pakistan.

Under the new measure, a levy of Rs1,247 per MMBTU has been imposed on captive power plants. The revenue generated from this levy will be utilized to lower electricity tariffs for all categories of power consumers.

According to the report, officials said the government plans to pass on the financial benefit to consumers on a monthly basis, providing relief in electricity bills. The Petroleum Division has issued a formal notification for the implementation of the levy on captive power plants for December 2025.

The levy has been imposed under the Off-the-Grid Captive Power Plants Levy Act 2025. The federal cabinet had earlier approved the mechanism to ensure that proceeds from the captive power levy are transferred to electricity consumers in the form of tariff relief.

Captive power plants, which are typically operated by industrial units for self-generation of electricity, will now contribute to the broader power sector through this levy. Officials maintain that the measure is aimed at improving financial sustainability in the energy sector while supporting efforts to reduce electricity costs for households and businesses.

The move is seen as part of wider structural reforms in the power sector agreed with the IMF to stabilize the economy and rationalize energy pricing. – ER Monitoring Desk

READ MORE