Textile exporters reject new levy on off-grid captive power plants

The Pakistan Textile Council (PTC), a forum representing textile and apparel exporters, opposed the Petroleum Division’s decision of imposing a Rs1,243 per MMBtu levy on off-grid captive power plants for December 2025 under the Off-Grid (Captive Power Plants) Levy Act, 2025.

“This is a policy-induced shock to Pakistan’s productive economy. At a time when the country is striving under Uraan Pakistan to raise exports to $60 billion, the government has chosen to impose one of the highest gas levies in recent history on the very industries that generate foreign exchange, create employment, and sustain industrial growth,” the PTC said in a press release.

“Within months, the levy has escalated from Rs402 per MMBtu to Rs1,243 per MMBtu — with a built-in increase to 20%.”

The PTC said results were already visible as export-sector gas demand had collapsed, national linepack breached danger thresholds, 300 MMCFD of domestic gas curtailed, LNG cargoes being diverted, and gas utilities were facing throughput shocks.

“The levy ‘over and above’ OGRA’s notified sale price. destroys tariff finality. If regulator-notified prices can be topped up at will through executive notification, then no energy price in Pakistan is final. Investors cannot hedge it. Industry cannot plan for it. Banks cannot finance against it. This creates sovereign overlay risk in an already fragile economy,” PTC chairman Fawad Anwar was quoted as saying in the press release.

The PTC urged the government to restore regulator-led pricing without executive overlays, protect high-efficiency cogeneration, remove cross-subsidy from commodity pricing, and align energy policy with export competitiveness and macroeconomic stability.