ISLAMABAD: The Shahbaz Sharif government has decided to provide another relief package to electricity consumers by utilizing the funds collected through the Captive Power Levy, fulfilling one of the key conditions set by the International Monetary Fund (IMF).
Under the plan, the government will pass on the revenue generated from the Captive Power Levy to electricity consumers in the form of monthly tariff reductions.
Government sources indicate that as the levy rate increases over time, consumers can expect even greater relief on their electricity bills.
The federal cabinet has already approved the proposal to transfer the benefit of this relief directly to power consumers.
According to official sources, the monthly collected levy amount will be passed on to consumers with a two-month lag.
The federal government has introduced a phased levy on captive power plants, starting at 5 percent immediately.
In the second phase, the levy will increase to 10 percent, followed by 15 percent in February 2026 and 20 percent in August 2026.
The funds collected through this levy will be used to reduce electricity tariffs across all consumer categories in the power sector.
Failure to pay the levy will result in action against the captive power plants, and in case of persistent default, gas supply to the concerned plant will be disconnected.
Every captive power plant using gas or LNG is now legally required to pay the levy to the federal government.
