The federal government has decided to pass on relief to electricity consumers through revenue collected from the captive power levy, sources told ProPakistani.
The levy imposed on captive power plants under an agreement with the International Monetary Fund (IMF) will now be used to provide monthly electricity relief, with the benefit expected to reach consumers every 2 months.
A 5 percent levy was imposed immediately in the first phase last year. Now the levy rate will increase to 10 percent, followed by 15 percent in February 2026. The final phase will see the levy raised to 20 percent in August 2026, sources added.
Pakistan had earlier shared its plan with the IMF to utilise proceeds from the captive power levy to reduce electricity prices. The levy was introduced under the Captive Power Plants Levy Act after the federal government increased gas tariffs for captive power plants. From February 1, 2025, the gas tariff for captive power plants was raised from Rs. 3,000 to Rs. 3,500.
Officials have warned that strict action would be taken against non-payment of the levy. In cases of persistent default, gas supply to the concerned captive power plant will be disconnected.