A sharp increase in gas levy to Rs. 1,243 per MMBtu has triggered strong opposition from Pakistan’s textile industry, with business leaders warning that the move could undermine the country’s export growth ambitions.
The Pakistan Textile Council said the levy, imposed on off-grid captive power plants for December 2025, represents a major cost shock to export-oriented industries that rely on gas for energy.
Industry leaders argue that the decision comes at a critical time when Pakistan is targeting exports of $60 billion under its economic roadmap, making the policy counterproductive for growth.
The levy has risen steeply within a short period, increasing from Rs. 402 per MMBtu to Rs. 1,243 per MMBtu, with further escalation built into the framework.
According to the industry, the immediate impact is already visible, with export sector gas demand declining, domestic gas curtailment reaching around 300 MMCFD, and LNG cargoes being diverted.
Concerns have also emerged over operational disruptions in gas utilities, as reduced industrial consumption affects throughput and system stability.
Chairman of the Pakistan Textile Council, Fawad Anwar, said the levy creates uncertainty in energy pricing by allowing additional charges beyond regulator notified tariffs.
He noted that such unpredictability makes it difficult for investors to plan, businesses to manage costs, and banks to finance industrial operations, increasing overall economic risk.
Industry stakeholders have also raised concerns over the structure of the levy, which applies equally to all captive power plants, including high efficiency cogeneration systems.
They argue that this approach discourages energy efficiency, as globally such systems are typically incentivized for reducing emissions and improving fuel utilization.
Another key concern is the use of levy proceeds to subsidize electricity tariffs for other consumer categories.
Industry representatives say this effectively shifts financial burden onto export oriented sectors, raising questions about fairness and economic efficiency. The Pakistan Textile Council has called for a review of the policy, urging the government to restore regulator based pricing, protect efficient energy systems, and align energy costs with export competitiveness.
