Petroleum Division sets Rs1,243 levy for off-grid captive power plants 

The Petroleum Division has imposed a levy of Rs1,243 per million British thermal units (mmbtu) for off-grid captive power plants (CPPs) for December 2025, in accordance with the Off-grid (Captive Power Plants) Levy Act 2025. 

This levy, detailed in a notification, was introduced following the passage of the Act earlier this year by the federal government.

The new levy, effective under section 3 of the Act, is part of a broader strategy to raise Rs105 billion in revenue for the fiscal year 2025-26. The proceeds are earmarked for reducing power tariffs for all consumer categories, excluding lifeline users.

In a progressive structure, the levy for CPPs will increase over time, starting at 5% over the industrial tariff, moving to 10% by August 2025, 15% by February 2026, and stabilizing at 20% from August 2026. 

The previous levy rate for August 2025 was set at Rs690 per mmbtu, while earlier in 2025, the levy was Rs570 per mmbtu for April, Rs550 for May, and Rs402 for June.