The Petroleum Division has notified a new levy rate of Rs690 per mmbtu for off-grid captive power plants (CPPs) applicable for August 2025, under the Off-Grid (Captive Power Plants) Levy Act, 2025.
According to the notification, issued under Section 3(1) of the Act, “the federal government is pleased to notify that the rate shall be Rs690 per mmbtu,” confirming its application specifically for August.
Parliament approved the CPPs levy law earlier this year, introducing a charge on natural gas and RLNG consumed by captive units. The levy is earmarked for reducing power tariffs for all consumer categories except lifeline users.
Under the law, the levy is set to increase in stages: a 5% fixed margin initially, rising to 10% from August 2025, 15% from February 2026, and stabilising at 20% from August 2026.
Levy rates notified earlier this year stood at Rs570 per mmbtu for April, Rs550 for May, and Rs402 for June. Officials estimate that revenue from CPPs in these months will remain significantly below projections due to falling industrial gas consumption.
For FY2025-26, the government has budgeted Rs105 billion in revenue from the CPPs levy. The measure forms part of an IMF-supported reform programme aimed at tightening fiscal discipline and shifting captive power plants toward grid reliance.
The Petroleum Division and Finance Division continue to engage on levy treatment under the IMF-linked budget framework, as policy discussions move toward the next fiscal review.
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