Islamabad: The Shehbaz Sharif government has decided to provide additional relief to electricity consumers, as the imposition of a captive power levy under an IMF condition has paved the way for reducing power tariffs.
According to the government’s plan, the amount collected through the captive power levy will be used to provide monthly relief to electricity consumers, enabling a gradual reduction in electricity prices.
Government sources said that higher relief for consumers is expected as the captive power levy rate increases. They added that the federal cabinet has already approved the transfer of the levy-based relief to electricity consumers.
Sources said that the benefit of the levy collected on a monthly basis will be passed on to consumers after an interval of two months. The federal government has enforced a law to impose a captive power levy of up to 20 percent in phases, with an immediate implementation of a five percent levy on captive power plants.
According to sources, in the second phase, the levy on captive power plants will be increased to 10 percent, followed by a rise to 15 percent in February 2026 and 20 percent in August 2026. The revenue generated from the levy will be used to reduce electricity tariffs for all categories of power consumers.
Sources further stated that action will be taken against captive power plants in case of non-payment of the levy, and gas supply to persistently defaulting plants will be disconnected. Every captive power plant will be bound to pay the levy to the federal government on the use of gas or LNG.
