ISLAMABAD: The Shahbaz Sharif government has decided to give electricity consumers a new round of relief. The move comes after the government imposed a new “captive power levy,” a step required under IMF conditions, which will now help make electricity cheaper.
The federal cabinet has approved a plan to transfer the benefit of the levy directly to consumers. Officials said the relief will be given every two months, and the amount could increase if the levy on captive power plants rises. Under the plan, a five percent levy has been immediately applied on captive power plants. It will gradually rise to 10 percent, 15 percent by February 2026, and 20 percent by August 2026. The money collected from this levy will be used to lower electricity tariffs for all categories of consumers.
Authorities warned that failure to pay the levy will lead to action against the power plants, including cutting off gas or LNG supplies for defaulters. The government will also submit an annual report on levy usage to Parliament three months after each financial year ends.
Earlier, on February 1, 2025, the government had increased tariffs for captive power plants by raising the gas price from 3,000 to 3,500 rupees per MMBTU, which was followed by the introduction of this levy.
