Govt Extends Captive Power Levy to Third-Party Suppliers

ISLAMABAD: The federal government has extended the monthly levy on captive power consumers to include third-party gas suppliers to captive power plants, aligning regulation across all providers, as reported by Business Recorder. The decision follows a Petroleum Division recommendation and operates under the Off the Grid (Captive Power Plants) Levy Act, 2025, notified on June 10, 2025. The Act empowers imposition and collection of an off-the-grid levy on natural gas used by captive power plants. The levy rate is calculated as the difference between industrial B3 power tariffs and the self-generation cost at OGRA-notified gas tariffs. Previously applied to Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) with progressive increases to 20% by August 2026, the levy is now extended to third-party suppliers to ensure uniform application. While gas prices for third-party suppliers remain unregulated, the extension was approved after consultations with the Ministry of Law and Justice, allowing the Petroleum Division to amend the Act’s schedule and bring all suppliers under the same levy framework.