ISLAMABAD: The off-the-grid levy ordinance, 2025 has been promulgated to meet by IMF terms, it is learnt.
A senior official privy to the development said the fund demanded timelines for increasing levy on industry and plan how to impose it.
The ordinance says the amount to be collected through levy will be used to reduce the tariff of electricity consumers of all categories.
The levy would be imposed after working out difference between power tariff of B3 Industry, which is at 36.92 per unit and electricity generation cost by CPPs.
When contacted, the Petroleum Division officials refused to comment on the issue on record.
Under the ordinance, 5pc will be imposed soon after Petroleum Division issues the notification. From July 2025, levy will be increased to 10pc. From February 2026, the levy would be further raised by 15pc, and in August 2026, it will go up to 20pc.
Top officials of Petroleum, Finance and Power Divisions would meet in a couple of days to thrash out difference of power tariff of B3 Industry and the cost of self-generation of electricity by CPPs, so that levy could be imposed.
In a letter to Petroleum Minister Muadik Malik on February 3, the All Pakistan Textile Manufacturers Association (Aptma) said that with the current captive gas tariff of Rs3,500 per MMBtu, cost of in-house power generation has already surpassed the current B3 grid tariff of 13 cents/kWh at various efficiencies. It includes 36pc average efficiency for captive generation agreed upon as a benchmark during the working session with DG Gas and CPPA-G officials, Aptma said.
In fact, the current gas tariff yields a cost of generation of around 15.4 cents per kWh at the benchmark efficiency, which is far above the B3 grid tariff, and therefore requires no additional levy, it said.
The industry maintained that at 30pc efficiency, their plants generate electricity at rate of Rs49.72 per unit (17.89 cents), at 35pc efficiency, they generate power at Rs42.91 per unit (15.44 cents) and on 40 percent, CPPs generate electricity at rate of Rs38.97 (14.02 cents) per unit. It shows CPPs are generating electricity more than the grid electricity fixed for B3 Industry. The Aptma said, “If the intent of levy is to equalise captive power costs with B3 grid tariffs, there is no clarity on adjustments in case the cost of captive generation is significantly greater than B3 grid tariffs.”
Aptma asked, “Would the levy mechanism allow for a negative adjustment if cost of captive generation at base tariffs exceeds grid power tariffs by more than the levy, as the case is currently?” Absence of such a mechanism raises further concerns about the rationale behind this measure, it added.
The officials said Aptma’s data about power rates by CPPs needs an audit whether claims of industry are true or not. They said the industry claims O&M of their captive power plant contributes Rs5 per unit in the tariff, but Nepra says O&M cost contributes Rs1.5 per unit in the tariff.
Aptma, however, told the minister in its letter the current structure of grid transition levy is entirely unacceptable, as its purpose of migrating energy demand from inefficient captive power plants to the grid is already achieved by current gas/RLNG prices.
“Imposition of additional levy is as detrimental as an outright discontinuation of gas supply to captive units, pushing the industry into an unprecedented crisis”, says the letter. “Negative implications for exports, employment and economic stability cannot be overstated. Urgent intervention is required to rectify this issue before irreversible damage is done,” the letter concludes.
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