The federal government has stepped up efforts to provide additional relief to electricity consumers, with a new plan emerging that aims to gradually bring down power tariffs.
According to sources, the government has decided to use revenue generated from a captive power levy, imposed under conditions linked to the International Monetary Fund, to reduce electricity prices across the country. The move is expected to create room for relief within the power sector while maintaining fiscal commitments.
Officials indicate that funds collected through the captive power levy will be utilized on a recurring basis to pass relief on to consumers. As the levy rate increases over time, authorities believe it will become possible to offer greater reductions in electricity tariffs.
The federal cabinet has already approved transferring the financial benefit of the levy directly to power consumers. However, instead of adjusting prices every month, the accumulated amount will be reflected in electricity tariffs after every two months, allowing smoother implementation.
To support this plan, the government has enacted legislation introducing a phased levy of up to 20 percent on captive power plants. Under the initial phase, a 5 percent levy has already been enforced. In the second phase, the rate will be raised to 10 percent, followed by an increase to 15 percent in February 2026. By August 2026, the levy is set to reach 20 percent.
Revenue generated through this mechanism will be used to lower electricity tariffs for all consumer categories, according to official sources. Authorities have also warned that strict action will be taken against captive power plants that fail to pay the levy. In cases of continued default, gas supply to the plant may be disconnected.
All captive power plants using gas or LNG will be legally required to pay the levy to the federal government, ensuring steady revenue flow to support long-term relief for electricity consumers.
