Gas Levy Reduction Likely for Industries After IMF Approval

ISLAMABAD: Costs for industrial consumers are expected to decrease as the International Monetary Fund (IMF) has reportedly approved a revised formula for the gas levy on captive power plants.

According to sources, the levy on captive power generation units may be reduced by 30 to 60 percent under the new framework. The change was made at the request of the Federal Minister for Petroleum, with the tariff now expected to be calculated on an average basis instead of peak-hour usage.

Previously, the levy was linked to peak consumption hours, a mechanism designed to discourage industrial reliance on captive power and encourage use of the national grid. The revised condition maintains that if demand for grid electricity falls, the levy may be increased again.

The policy aims to shift industries toward the national power system amid concerns over high electricity costs impacting industrial competitiveness.

Currently, captive power plants are charged a levy of Rs1,343 per MMBTU. The government has set a revenue target of Rs105 billion from this levy in the current fiscal year.