ECC Approves Tariff Relief from New Levy

Islamabad, September 2, 2025, 09:39 PM PKT — The government has unveiled a strategic move, approving a mechanism to deliver electricity tariff relief to consumers using funds from the newly enacted Off the Grid (Captive Power Plants) Levy Act, 2025, aiming to incentivize industries to join the national grid, as endorsed by the Economic Coordination Committee (ECC) of the Cabinet, per official sources. The Ministry of Energy (Power Division) detailed that Parliament’s new law imposes a levy on natural gas and RLNG for captive power plants, starting at 5% above the industrial tariff, rising to 10% from August 2025, 15% from February 2026, and 20% from August 2026, with benefits extended to all consumer categories except lifeline users.

The levy funds, transferred monthly from the Petroleum Division to the Finance Division, then to the Power Planning and Monitoring Company (PPMC), will be calculated per unit by PPMC and verified by the National Electric Power Regulatory Authority (NEPRA), reflecting in bills with a two-month lag (e.g., January levies in March bills). Despite Ministry of Commerce’s push for industrial-only relief, the Power Division upheld the law’s mandate for all consumers, backed by the Law Division, while the Finance Division flagged IMF fiscal framework constraints, prompting an ECC directive to seek IMF clarification. The measure aims to reduce electricity costs and shift industries from inefficient captive power. Web context on energy reforms shows past hurdles, while posts found on X reflect hope mixed with skepticism—some welcome relief, others question IMF impact. Critically, the narrative of “tariff support” may mask fiscal tensions—web data hints at budget strains, and X sentiment suggests distrust in sustainable relief, pointing to potential challenges.