Islamabad May 22 2025: The National Assembly of Pakistan on Thursday passed the Off the Grid Captive Power Plants Levy Bill 2025 with a majority vote.
The bill was presented by Minister for Petroleum, Ali Pervaiz Malik.
Country is shifting captive power plans (CPPs) to the electricity grid – which will boost grid demand while channeling scarce indigenous gas resources to the most efficient gas-based power generators – remains a key objective.
Government increased the price of all gas for CPPs to the equivalent of the industrial grid price plus a 5 percent through an increase in the cost of gas to CPPs plus created a new CPP Transition Levy (CPL) via Presidential Ordinance on January 31, now this will bill give permanent cover to Presidential Ordinance.
The CPL will automatically increase the premium over the grid equivalent price by an additional 5 percentage points every six months until the premium is 20 percent in August 2026. Levy proceeds (the delta between the headline CPP gas price and baseline CPP gas price of PKR 3,500/mmbtu) will be transferred to the electricity grid on a monthly basis to reduce the average effective tariff and reduce prices evenly across the existing power tariff structure.
Taken together, these price-based incentives will motivate a shift of CPPs to the grid.
