The government’s revenue from the off-grid levy on captive power plants (CPPs) is expected to fall sharply in April, May, and June 2025 as industrial gas consumption continues to slide, The News has reported.
Latest official figures show a steep decline in gas use by CPPs. Under Sui Northern Gas Pipelines Ltd (SNGPL), gas demand has dropped from 150 million cubic feet per day (mmcfd) to only 26 mmcfd. In other regions, consumption has fallen from 200 mmcfd to 95 mmcfd.
These numbers are far below budget assumptions, which were based on a projected consumption of 350 mmcfd — a figure industry players had already called unrealistic.
For April, the levy was fixed at Rs. 570 per MMBTU, followed by Rs. 550 in May and Rs. 402 in June. Officials admit revenue collection will remain negligible as industries cut down gas usage nationwide.
The federal budget had targeted Rs. 105 billion from the off-grid levy, but with gas consumption shrinking, that target is now considered impossible to achieve.
Industries, especially textile exporters, have long relied on CPPs running on local and imported gas to ensure stable and quality power supply. But under International Monetary Fund (IMF) conditions, the government raised gas prices for CPPs to Rs. 3500 per MMBTU.
READ MORE: Govt Raises Gas Prices for Power Plants to Meet IMF Terms
At the same time, a phased off-grid levy was introduced, starting at 5% in February 2025, rising to 10% in July 2025, 15% in January 2026, and 20% by August 2026.
Rising input costs have put severe pressure on the export sector. Many factories have reduced or even shut down their gas usage, which has also hurt textile exports.
