In Islamabad, the federal government has imposed a levy on captive power plants as part of a condition set by the International Monetary Fund, paving the way for reduced electricity tariffs for consumers.
Under the new policy, a levy of Rs1,247 per MMBTU has been applied to captive power plants. The revenue generated from this levy will be used to lower tariffs for all categories of electricity consumers across the power sector.
The government has planned a monthly electricity relief scheme for consumers, funded through the proceeds of the captive power levy. This measure is intended to provide direct financial relief to households and commercial users while maintaining the financial sustainability of the power sector.
The Petroleum Division of Pakistan has issued a notification implementing the levy on captive power plants effective December 2025. This is in accordance with the Off-the-Grid Captive Power Plants Levy Act 2025, which grants the federal cabinet the authority to transfer the benefits of the levy directly to electricity consumers.
