Govt to provide major relief in electricity bills in 2026

ISLAMABAD: The government is outlining a plan to ease the electricity tariff for the consumer by cutting down prices as the country secured an agreement with the International Monetary Fund (IMF).

There shall be a new tax on captive power plants, which will generate funds for low electricity tariffs and alleviate the power industry.

Correspondingly, when the levy increases, the price per unit of electricity will decrease, and officials are expecting that.

The federal cabinet has already approved that it would be passed down to consumers. It has also come out that there won’t be a change in electricity prices every month; instead, there will be a change every two months.

To implement this, a 20% tax is being introduced in phases on all “captive power plants.” This will be introduced in two phases, in which the tax is 5% in the first phase, progressing to 10% in the second phase.

By February 2026, the tax will move to 15%, while by August 2026, it will move to 20%.

The monies raised from these taxes will be directed towards cutting down the tariffs on users of various forms of power.

Further details included that in case the payment isn’t received, there will be action taken against the captive power plants, while defaulting several times might even result in the gas supply to such a plant being interrupted.

Each power station must now pay the levy to the government based on its consumption of either gas or liquefied gas.