PPEPCA Welcomes Downward Revision of Captive Gas Levy
The Pakistan Power and Energy Producers and Consumers Association has welcomed the government's decision to revise downward the captive power levy, calling the move a step in the right direction for industrial competitiveness. The revision addresses longstanding concerns from manufacturers who rely on captive gas plants to stabilise their production costs.
Captive gas users, primarily in the textile and industrial manufacturing sectors, have argued that excessive levies on captive power undermine their ability to compete in export markets and force unplanned reliance on the national grid, which itself suffers from reliability issues. A reduction in the levy is expected to partially restore the cost advantage of on-site generation.
The government's move is likely connected to pre-budget consultations and broader efforts to incentivise industrial energy efficiency while reducing pressure on the grid. However, PPEPCA and industry observers note that further rationalisation will be needed to fully restore confidence in captive power as a viable industrial energy solution.
The revision comes amid a broader energy cost environment that remains challenging, with petroleum levies and LNG prices rising simultaneously. Industry groups continue to engage with the government on the full range of energy cost burdens ahead of the upcoming federal budget.
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