a day ago
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- Business Recorder
Off-the-grid CPP levy bill gets President's assent
ISLAMABAD: The President of Pakistan has conveyed assent to the 'The Off the Grid (Captive Power Plants) Levy Bill, 2025' already approved by both Houses of the Parliament.
On May 22, 2025, National Assembly, passed, 'The Off the Grid (Captive Power Plants) Levy Bill, 2025', which states that the rate of levy shall be increased by five percent immediately and further increased to 10 percent by July 2025, 15 percent by February 2026 and 20 percent by August 2026.
Federal Minister for Petroleum Ali Pervaiz Malik, presented this money bill in the Lower House of Parliament for passage, the opposition members opposed it. The House passed the bill with majority.
PD clarifies CPP levy adjustments to be reflected in future bills
According to Ministry of Parliamentary Affairs, the assent of the President to the Bill titled 'The Off the Grid (Captive Power Plants) Levy Bill, 2025', received through Prime Minister Office's on June 6, 2025 in has been sent to the concerned Ministries for further action .
The clause 03 of the bill states, 'Imposition and collection of levy. - (1) Subject to section 4, every captive power plant shall pay to the federal government a levy on consumption of natural gas or RLNG, over and above the sale price notified under section 8 and section 43B of the Oil and Gas Regulatory Authority Ordinance, 2002, at such rate as notified by the federal government in the official Gazette, from time to time.(2) The agent shall be responsible for billing of levy to captive power plants, its collection and onward payment to the federal government in the manner as may be prescribed.'
The clause 04 of the bill further reads, 'Calculation of rate of levy. - Before notifying the levy under sub-section (1) of section 3,the divisions concerned under the Rules of Business, 1973 shall calculate the rate of levy by taking into account the difference of power tariff of industrial B3 category, notified by Nepra, and the self-power generation cost of the captive power plant at the gas tariff notified by OGRA: Provided that the rate of levy shall be increased by five percent immediately and further increased to ten percent by July, 2025, fifteen percent by February, 2026 and twenty percent by August, 2026.'
About the utilisation of levy, clause 05 of the bill, says, '(1) The levy shall be utilized by the Federal Government for reduction of power generation tariff for all consumer categories of the power sector.(2) An annual report in respect of the utilization of the levy shall be laid before both the Houses of Majlis-e-Shoora (Parliament) after three months from the end of each fiscal year.'
The clause 06 of the bill states:' consequences for non-payment of levy. - (1) If the amount of levy is not paid within the specified time by the captive power plant, the same shall be recoverable under sub-section (2) and in case of persistent default in payment, the agent shall terminate the gas supplies to the defaulted captive power plant.(2) The amount of levy due but not paid within the time allowed shall be recoverable under the provisions of the Public Finance Management Act, 2019.'
Moreover, clause 07 of the bill explains, 'Allowance to be made for levy for purposes of Income Tax. - The levy paid by a captive power plant shall be an expenditure for which allowance is to be made under the Income TaxOrdinance,2001 in computing its profits or gains.'
To remove any difficulty for implementation on the law, clause 10 of the bill gives power to the president of Pakistan to settle it. Furthermore, Clause 10 of the bill states, 'Removal of difficulties. - If any difficulty arises in giving effect to the provisions of this Act, the President may make an order, not inconsistent with the provisions of this Act, to remove the difficulty.'
The National Assembly Standing Committee on Petroleum and Natural Resources in its meeting of May 22,2025 had also recommended emphasizing that meaningful consultation is fundamental and that a comfort level must be provided to the industrial sector to ensure they are not abruptly disconnected from captive power. It was further suggested that the transitional plan be submitted by the Power Division to the Committee to help mitigate and resolve outstanding issues.
The Committee recommended that future submissions particularly those related to the transitional plan prepared by the Power Division in collaboration with K-Electric-be presented to the Committee in a more concise and reader-friendly format, with minimal paperwork.
The Committee recommended convening an in-camera meeting to facilitate a more productive and detailed discussion on the Memorandum of Economic and Financial Policies (MEFP).
The Committee agreed that, upon receipt of the relevant documents and agreements made with industries, the Power Division will be invited to a future meeting to review the situation. Additionally, the Committee resolved to closely monitor K-Electric's progress, given its direct impact on gas diversion, and decided that K-Electric will also be summoned to participate in the upcoming meeting.
The Committee recommended that captive power users should not be restricted from accessing natural gas but should instead be charged higher rates. The discussion also included non-export-related consumers whose meters are to be changed. It was agreed that the Power Division should be invited to discuss these matters in detail. The Minister for Petroleum Division supported this recommendation, and a representative from the Power Division may also be called to participate in the discussions.
The Committee thoroughly considered 'The Off the Grid (Captive Power Plants) Levy Bill, 2025' (Ord. No. 1 of 2025) and recommended its passage by the National Assembly.
Copyright Business Recorder, 2025
