The International Monetary Fund has agreed to let Pakistan change the way it calculates the captive gas levy, offering potential cost relief to industries that generate their own electricity.
Under the updated formula, the levy will no longer be based only on peak electricity tariffs. Instead, it will use a weighted average of both peak and off-peak industrial electricity rates.
This change is expected to significantly reduce costs for businesses relying on gas-based power generation.
According to estimates, the levy for March could drop from around Rs. 1,303 per mmBtu to nearly Rs. 522 per mmBtu.
Officials say the final reduction may range between 30% and 60%, depending on how electricity tariffs change in the coming months.
The revision was requested by Petroleum Minister Ali Pervaiz Malik during recent discussions with the IMF. The goal was to ease financial pressure on industries facing high energy costs.
However, the IMF has attached conditions to this relief. It has made it clear that the change should not reduce electricity consumption from the national grid.
If industries shift away from the grid, the government may be required to increase the levy rate to 20% earlier than planned.
The policy is designed to encourage industries to use electricity from the grid instead of producing their own power using gas.
Officials also warned that further increases in the levy could be considered if demand for grid electricity continues to fall.
The development comes as energy costs and sector losses remain key challenges for Pakistan’s economy.