Pakistan to impose levy on captive power plants to meet IMF condition

Captive industry gas prices to align with LNG rates, sources confirm.

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The federal government has made a key decision to meet another significant condition set by the International Monetary Fund (IMF), agreeing to impose a levy on captive power plants before the release of the next tranche of funding.

According to sources, the government has made preparations to implement this levy on captive power plants, which will be applied gradually to prevent a significant reduction in gas supply to these plants.

Sources indicated that the IMF has shown flexibility on the issue of gas cuts to captive power plants, and the levy will be introduced before the next IMF tranche is disbursed.

In the first phase, a 5% levy on the gas supplied to captive power plants could be implemented in January, while the second phase may see the levy increase to 10%.

The sources further revealed that the price of gas supplied to the captive industry will be brought in line with LNG prices. The imposition of this levy aims to eliminate the disparity between captive power plants and other industries.

The IMF has raised concerns over the different electricity rates for captive and non-captive industries.

Meanwhile, the Pakistan Stock Exchange (PSX) saw a significant decline today, with the KSE-100 index shedding 1,840.96 points, or 1.58%, to current index at 114,414.16 during intra day trading.

The index reached a high of 116,843.41 points during the day but ultimately failed to maintain its upward momentum, dipping to the low of 114,414.16 points by the end of trading.

Despite the negative movement in the index, trading activity remained high, with 184,728,288 shares exchanged, leading to a turnover value of approximately PKR 14.77 billion.

The PSX's previous close was recorded at 116,255.12 points, reflecting a substantial drop in market performance during the intra day.

Earlier, Prime Minister Shehbaz Sharif announced that the United Arab Emirates (UAE) has agreed to roll over a $2 billion loan deposit, offering significant fiscal relief to Pakistan.

Chairing a cabinet meeting, the prime minister shared details of his recent meeting with UAE President Sheikh Mohamed bin Zayed Al Nahyan, which took place in Rahim Yar Khan.

PM Shehbaz stated that the UAE leader proposed extending the $2 billion loan repayment due in January, a gesture aimed at supporting Pakistan’s economic stability.

“He [UAE president] happily informed me that the $2 billion owed by Pakistan in January was being extended by the UAE. He proposed it himself and immediately issued directives,” Prime Minister Shehbaz said.