Rehan Shahid 
Jan 06, 2026
The government has plans to give major relief to electricity consumers through revenue collected from the captive power levy. Under an agreement with the International Monetary Fund (IMF), the levy imposed on captive power plants will now be used to provide electricity relief to Pakistanis.
A 5% levy was imposed in the initial phase last year, but now the government plans to increase levy rate to 10%, followed by 15% in February 2026. The final phase will see the levy raised to 20% in August 2026.
Earlier, Pakistan shared its plan with the IMF to use proceeds from the captive power levy to reduce electricity prices.
It should be noted that the levy was introduced under the Captive Power Plants Levy Act after the government increased gas tariffs for captive power plants. From February 1, 2025, the gas tariff for captive power plants was raised from Rs3,000 to Rs3,500.
Officials alerted 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.
Who will get benefit from electricity relief?
The relief plan is aimed to benefit:
- Residential electricity users
- Small businesses and shop owners
- Commercial consumers affected by high operating costs
While large industries will contribute through the levy, everyday consumers are expected to see lower per-unit charges over time.
