Govt directs gas companies to begin billing captive power users under new grid levy

The federal government has instructed gas utilities to initiate billing of captive power consumers under the newly enacted Grid (Captive Power Plants) Levy Ordinance, 2025. The move marks the formal commencement of levy collection from captive power users for the month of February 2025.

According to a directive issued by the Ministry of Energy (Petroleum Division), the billing must be carried out in accordance with Section 3 of the ordinance, which mandates a levy on gas consumption by captive power plants not connected to the national grid.

The letter further directed relevant gas distribution companies to ensure compliance without delay and urgently report the total amount already billed or to be billed to the concerned authorities.

The ordinance, promulgated earlier this year, is part of a broader energy sector reform agenda aimed at discouraging inefficient captive power generation and encouraging industrial consumers to shift toward the national electricity grid.