ISLAMABAD, May 16 – The Senate Standing Committee on Finance and Revenue on Thursday unanimously approved the Captive Power Plants Levy Bill 2025, granting legal cover to a controversial grid levy imposed on natural gas and RLNG supplies to industrial captive power plants (CPPs), effective from March 7.
The bill, introduced at the behest of the International Monetary Fund (IMF), is part of Pakistan’s commitments under the \$7 billion Extended Fund Facility (EFF). It aims to encourage industrial CPPs to shift to the national electricity grid, reduce excess power capacity burdens, and ultimately lower tariffs for general consumers.
Chaired by Senator Anusha Rahman of the PML-N, the committee endorsed the bill without any amendments. Secretary Petroleum Momin Agha informed the committee that a 5% levy had already been enforced and would rise to 10% in July, followed by further increases—15% by February 2026 and 20% by August 2026. This would push the effective gas price close to Rs6,000 per mmBtu, making self-generation costlier than grid electricity.
The bill also seeks to formalize the Rs791 per mmBtu grid levy introduced earlier this year through an ordinance. The delay in its notification prompted an upward revision in the rate to compensate for the lapse.
The levy is calculated based on the difference between the NEPRA-notified B3 industrial power tariff and the self-generation cost of CPPs using gas at OGRA-notified rates. Failure to pay the levy may result in recovery measures or termination of gas supply to defaulting plants.
The government claims the collected levy will be used to reduce electricity tariffs for other consumers and address liquidity challenges in the power sector, aligning with IMF conditions to expand grid utilisation and reduce reliance on subsidized gas.
