Islamabad: (Mudassar Ch/ Web Desk) The Shehbaz Sharif government has decided to provide additional relief to electricity consumers, paving the way for cheaper electricity by imposing a captive power levy as per IMF conditions.
The government has drafted a plan to use funds collected from the captive power levy to provide monthly electricity relief to consumers. Sources said that higher levy rates could translate into greater relief for electricity users. The Federal Cabinet has already approved the transfer of captive power levy benefits to electricity consumers.
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According to government sources, the monthly levy collections will be distributed to consumers at two-month intervals. The federal government has implemented a phased approach for the levy, which will eventually reach 20 percent on captive power plants. Initially, a 5 percent levy has been applied immediately.
In the second phase, the levy on captive power plants will increase to 10 percent, rising to 15 percent in February 2026 and reaching 20 percent by August 2026. Revenue collected from the levy will be used to reduce electricity tariffs across all consumer categories in the power sector.
Non-payment of the levy will result in action against captive power plants, and in cases of persistent default, the government may suspend gas supply to the respective plant. Every captive power plant using gas or LNG will be obligated to pay the federal levy.
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