The federal government has approved the extension of the existing monthly levy on captive power gas consumers to include customers supplied by third party gas companies. The decision brings third party suppliers at par with Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited under the Off the Grid Captive Power Plants Levy framework.
Sources said the federal cabinet also authorised the Petroleum Division to amend the Schedule of the relevant law after vetting by the Ministry of Law and Justice. The move aims to ensure uniform levy implementation across all captive power plants consuming natural gas or RLNG, regardless of the supplier.
The Off the Grid Captive Power Plants Levy Act 2025 was enacted and notified on June 10 last year. The law provides for the imposition and collection of a levy on captive power plants over and above the gas sale price notified under the OGRA Ordinance 2002. Under the Act, agent companies are responsible for billing and collecting the levy on behalf of the federal government.
The levy rate is calculated by considering the difference between the industrial B3 electricity tariff notified by Nepra and the self generation cost of captive power plants at OGRA notified gas prices. The law provides for a phased increase in the levy starting with five percent and gradually rising to twenty percent by August 2026.
While SSGCL and SNGPL are clearly defined under the Act, provisions also allow the inclusion of any other company engaged in the sale of gas to captive power plants through amendments to the Schedule. Legal opinion confirmed that once notified, third party suppliers would be bound to collect the levy as agents.
The Petroleum Division highlighted that OGRA does not currently notify gas purchase and sale prices for third party suppliers, which could complicate levy calculations and expose the government to legal challenges. To address this gap, the cabinet approved applying the same levy rate already notified for SSGCL and SNGPL consumers to third party supplied captive power plants, ensuring consistency and safeguarding public revenue.
