Islamabad: The implementation of the captive power levy, imposed as a condition of the International Monetary Fund, has paved the way for a reduction in electricity prices, with the government describing the move as a significant step toward providing relief in the power sector.
The federal government has imposed a levy of Rs 1,247 per MMBTU on captive power plants. According to officials, the revenue generated from this levy will be utilized to reduce electricity tariffs for consumers across all categories in the power sector, thereby providing financial relief to the public.
The government has devised a plan to use the amount collected under the captive power levy to provide monthly relief to electricity consumers through their bills, enabling a phased reduction in prices.
The Petroleum Division has issued a formal notification for the implementation of the levy on captive power plants for December 2025, marking the commencement of its enforcement.
The levy has been imposed under the Off-the-Grid Captive Power Plants Levy Act 2025, and the federal cabinet has already approved the transfer of relief generated from the captive power levy directly to electricity consumers.
