The International Monetary Fund (IMF) has granted Pakistan permission to modify the price formula used to determine the captive gas levy, a move that could reduce gas prices for industrial consumers utilizing the fuel for in-house power generation by up to 60%.
صنعتی صارفین کیلئے گیس سستی ہونے کا امکان ہے، آئی ایم ایف نے گیس لیوی میں کمی کی اجازت دے دی، کیپٹو پاور پلانٹس پر لیوی میں 30 سے 60 فیصد تک کمی متوقع ہیں۔
وزارت پیٹرولیم ذرائع کے مطابق آئی ایم ایف نے گیس لیوی کا نیا فارمولا منظور کرلیا، وفاقی وزیر پیٹرولیم علی پرویز ملک کی… pic.twitter.com/1LznaWG17z
— SAMAA TV (@SAMAATV) April 29, 2026
The revised formula shifts the reference price from the peak B3 industrial rate to a weighted average of the peak and off-peak B3 industrial rates. This adjustment is expected to significantly lower the levy rate, potentially providing substantial relief to industrial consumers. For example, based on current peak rates, the captive levy could decrease from Rs1,303 per mmBtu to approximately Rs522 per mmBtu.
However, the IMF has stipulated that this reduction must not negatively impact electricity demand from the national grid. Should a decrease in power demand occur, the government may be required to increase the gas levy to 20% before the initially planned date of August.
The government had requested the change in the price formula during recent talks with the IMF. While the IMF initially expressed reservations, it has now agreed to allow the use of average tariffs for calculating the levy.
The IMF has maintained its stance against freezing or exempting efficient plants from the 15% additional gas levy on industry’s in-house power plants, and has instructed the government to be ready to increase the rate to 20% if necessary to maintain high prices after the formula adjustment.
The captive power levy aims to discourage industries from using gas for in-house electricity generation and encourage a shift to the national power grid. The petroleum minister had previously communicated to the IMF that the levy was causing losses to Sui companies due to the diversion of imported gas to low-end consumers.
The IMF has stated that the CPP levy should be viewed as a tool to discourage gas usage in inefficient in-house plants. They also stated that users who have already shifted to the national grid should not switch back to the gas network after a change in the price formula.
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