The federal government of Pakistan has decided to provide additional relief to electricity consumers using revenue from the Capto Power Levy, which was introduced under IMF conditions. The plan aims to reduce electricity tariffs and ease the financial burden on households and businesses across the country.
How the Plan Will Work
According to government sources, the revenue collected from the Capto Power Levy will be used to provide electricity relief on a bi-monthly basis. While the revenue is collected monthly, the relief will be applied every two months to adjust electricity rates effectively.
Officials expect that as the Capto Power Levy rate increases, greater reductions in electricity tariffs will be possible for consumers.
Phased Implementation of the Levy
The federal cabinet has approved the use of Capto Power Levy revenue for electricity relief, and the levy is being implemented in phases:
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Immediate Phase: 5% levy on Capto Power plants
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Second Phase: 10% levy
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February 2026: 15% levy
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August 2026: 20% levy
All funds collected through this levy will be directly used to reduce tariffs for all categories of electricity consumers, providing widespread financial relief.
Enforcement and Compliance
Government sources emphasized that non-payment of the levy will trigger action against Capto Power plants. Continuous default could lead to disconnection of gas supply to the defaulting plant.
All Capto Power plants are required to pay the levy on gas or LNG usage, ensuring that the revenue is collected systematically and allocated for consumer relief in the power sector.
Expected Impact on Consumers
This initiative is expected to bring meaningful reductions in electricity bills, improve affordability, and ease the economic burden on households and businesses while maintaining compliance with IMF agreements.
