By SKM
April 29, 2026
In a development welcomed by the textile sector, the All Pakistan Textile Mills Association (APTMA) has appreciated the IMF-backed revision of Pakistan’s gas captive power levy formula, calling it a timely relief for export-oriented industries struggling with high energy costs.
The International Monetary Fund has agreed to revise the calculation mechanism for the “off-the-grid” levy on gas used by captive power plants, shifting from peak-hour electricity tariffs to an average of peak and off-peak industrial rates. The change has reduced the levy by about 61 percent, easing pressure on industrial gas users and improving cost competitiveness for exporters.
APTMA Chairman Kamran Khurshid appreciated the efforts of Federal Minister for Petroleum Ali Pervaiz Malik and the Petroleum Division team for successfully negotiating the adjustment with the IMF. He said the revised formula would help reduce energy input costs at a critical time for the export sector, which has been under strain due to rising global competition and high domestic energy prices.
Previously, industrial users operating captive power plants were paying nearly Rs4,800 per MMBtu, including both the base gas price and the levy. The revised structure brings the levy down from around Rs1,303 per MMBtu to nearly Rs500 per MMBtu, significantly lowering overall costs.
Officials noted that gas consumption in the export sector had already declined sharply due to earlier high tariffs, forcing many industries to reduce reliance on captive power generation. While the IMF did not agree to freeze or delay future levy increases, it accepted Pakistan’s request to revise the calculation method.
Energy authorities said the policy is part of broader reforms aimed at discouraging captive gas-based power generation and shifting industries toward grid electricity. However, exporters argue that cost stability is essential to maintain competitiveness in international markets.
Despite the long-term reform direction remaining intact, APTMA emphasized that the revised formula provides much-needed short-term relief for mills facing liquidity and cost pressures, allowing them to stabilize operations while adapting to the evolving energy framework.Ends
