ISLAMABAD: In a significant policy shift, the International Monetary Fund has allowed Pakistan to revise the pricing formula for captive gas levy, paving the way for a reduction of up to 60% in gas costs for industrial users generating in-house power.
Under the new mechanism, the levy will be calculated using a weighted average of peak and off-peak B3 industrial tariffs, instead of relying solely on peak rates notified by the National Electric Power Regulatory Authority. This adjustment could bring the levy down from Rs1,303 per mmBtu to around Rs522 per mmBtu, offering substantial cost relief.
However, the IMF has attached strict conditions, requiring that the move should not reduce industrial reliance on the national grid. If electricity demand declines, the levy may be raised to 20% or higher ahead of schedule.
The proposal, pushed by Petroleum Minister Ali Pervaiz Malik, aims to balance industrial competitiveness with energy sector sustainability, while discouraging inefficient captive power generation.
Story by Shahbaz Rana
