Recovery of Petroleum Levy Arrears
The Economic Coordination Committee (ECC) of the federal cabinet has approved a recovery plan for petroleum levy arrears worth Rs47 billion. These arrears will be collected from Synergetico Refinery. The decision was finalized during a meeting chaired by Finance Minister Muhammad Aurangzeb.
Oil Pipeline Project with Azerbaijan
The committee also approved a major infrastructure project. An oil pipeline will be constructed from Multan to Rawalpindi in collaboration with Azerbaijan. Officials confirmed that the project is expected to improve energy transportation and reduce logistical challenges.
Captive Levy and IMF Agreement
The Captive Levy is another key decision. It is part of Pakistan’s commitment to the International Monetary Fund (IMF). This levy applies to gas and RLNG supplied to captive power plants of industrial units.
The levy came into force on July 1. It began at a rate 5% above the notified tariff. The rate will increase to 10% from August 1, then to 15% from February 1, 2026, and finally to 20% from August 1, 2026.
Use of Captive Levy Funds
By law, funds raised through this levy must only be used to reduce electricity tariffs for all consumers. This clause was added to the Captive Levy Act, passed by Parliament. The measure ensures transparency and prevents misuse of the revenue.
Industrial Sector Pressure Resisted
Certain influential business groups attempted to divert the levy funds. They demanded exclusive allocation for reducing industrial electricity tariffs. However, the Power Division resisted these efforts. Officials stressed that the legal obligation under the Captive Levy Act required benefits for every consumer, not just industries.
Ensuring Fair Relief
Authorities have reassured the public that collected funds will lower tariffs across the board in the country. The ECC emphasized that no sector would receive preferential treatment in any circumstances. The focus remains on protecting households and industries equally, while maintaining compliance with international commitments.
