National Assembly Passes Off the Grid Levy Bill for Captive Power Plants

Strategic Insights -

The National Assembly swiftly passed the Off the Grid (Captive Power Plants) Levy Bill, 2025, through a supplementary agenda without debate. The bill, aimed at providing a legal foundation for the grid levy on natural gas or imported LNG supplied to industrial captive power plants, was introduced by Minister for Petroleum Division Ali Pervaiz. The bill's passage comes after the approval of the Income Tax (Amendment) Bill 2024 and the presentation of the federal budget for the next fiscal year. The Standing Committee on Petroleum, chaired by Mustafa Mehmood, had previously approved the bill, and the opposition's challenge was met with a 99-44 vote defeat.

Key Takeaways:

  • The Off the Grid (Captive Power Plants) Levy Bill, 2025, was passed by the National Assembly without debate, providing a legal foundation for the grid levy on natural gas or imported LNG supplied to industrial captive power plants.
  • The bill was introduced by Minister for Petroleum Division Ali Pervaiz, who provided a detailed briefing on its importance in fulfilling Pakistan's commitments under the International Monetary Fund's (IMF) Extended Fund Facility (EFF).
  • The goal of transitioning industries from captive power systems to the national grid is to optimise surplus electricity generation, improve efficiency in the power sector, and reduce financial pressures on the economy.
  • Protections for the industrial sector have been included in the bill to prevent disruptions to industrial operations, and the government had already implemented the policy through an ordinance earlier this year.
  • The ordinance, which included a 23% increase in gas rates for industrial CPPs in March, is set to expire, making it necessary for the government to secure parliamentary approval for the policy.
  • The bill does not require approval from the Senate, but the Senate's finance committee did approve it on May 16 without offering any recommendations.
  • The opposition challenged the ruling allowing the bill to be presented for passage, but it faced a 99-44 vote defeat.

Statistics:

  • 99: The number of votes in favor of the ruling allowing the bill to be presented for passage
  • 44: The number of votes against the ruling allowing the bill to be presented for passage
  • 23%: The increase in gas rates for industrial CPPs implemented through the ordinance in March
  • May 16: The date on which the Senate's finance committee approved the bill without recommendations

Sources:

  • Dawn (without a specific date mentioned)
  • Pakistan's National Assembly (without a specific date mentioned)
  • Standing Committee on Petroleum (without a specific date mentioned)
  • International Monetary Fund (IMF) (without a specific date mentioned)