The federal government of Pakistan is preparing to provide additional relief to electricity consumers through a new plan aimed at reducing electricity tariffs. Under the plan, funds collected from the Capital Power Levy, imposed in line with IMF requirements, will be used to lower electricity rates.
According to government sources cited by private TV channels, the levy proceeds will be applied to provide monthly relief to consumers. As the levy rate increases, the government expects greater reductions in electricity tariffs.
The federal cabinet has already approved the transfer of benefits from the Capital Power Levy directly to electricity users. The relief will be applied in two-month intervals rather than on a monthly basis.
Under the phased plan, the government has imposed a 5 percent levy on Capital Power Plants initially, which will increase to 10 percent in the second phase. By February 2026, the levy is expected to rise to 15 percent, and by August 2026, it will reach 20 percent. The revenue generated will be used to reduce tariffs for all categories of electricity consumers.
Authorities also warned that non-payment of the levy by power plants will trigger legal action, and repeated defaulters may face suspension of gas supply. Each Capital Power Plant is required to pay the levy on the use of gas or LNG.
