Islamabad: The federal government has decided to provide another round of relief to electricity consumers, paving the way for lower power tariffs through the imposition of a captive power levy under an agreement with the International Monetary Fund (IMF).
According to official sources, the government plans to utilise revenue generated from the captive power levy to offer monthly electricity tariff relief across all consumer categories. The federal cabinet has already approved the transfer of this relief directly to electricity consumers.
Sources said the government expects greater tariff relief as the levy rate increases in phases, with the benefit of the collected levy to be passed on to consumers every two months.
Under the newly enacted law, the government has introduced a phased levy of up to 20 per cent on captive power plants. A 5pc levy has been implemented immediately, while the second phase will raise the levy to 10pc. The rate will further increase to 15pc in February 2026 and reach 20pc by August 2026.
Officials confirmed that the proceeds from the levy will be used to reduce electricity tariffs for all categories of power consumers, helping ease the financial burden amid rising energy costs.
The government has also warned of strict action against defaulters, stating that failure to pay the levy will result in penalties, while persistent non-compliance could lead to the disconnection of gas supply to the concerned captive power plant.
All captive power plants operating on gas or LNG will be legally bound to pay the levy to the federal government.
