By layering a steep levy over regulated gas prices, the state is trading short-term fiscal signalling for long-term export risk.
Pakistan’s Textile Council (PTC) has fired a warning shot at the Petroleum Division: a new Rs1,243 per MMBtu levy on off-grid captive power plants for December 2025 is, in its words, a policy shock aimed at industry—but landing on exports.
The levy, imposed under the Off-Grid (Captive Power Plants) Levy Act, 2025, has risen from Rs402/MMBtu to Rs1,243/MMBtu in a matter of months, and includes an embedded 20% escalation mechanism, PTC says. The council argues that this abruptly raises energy costs for export-oriented manufacturers that rely on captive cogeneration to stabilise power quality and uptime.
PTC claims the disruption is already spilling into the gas system: export-sector demand has “collapsed”, linepack has breached critical thresholds, around 300 MMCFD of domestic gas has been curtailed, LNG cargoes diverted, and gas utilities hit by throughput shocks.
Two risks stand out. First, competitiveness: higher and less predictable energy costs tax Pakistan’s most tradable sector precisely as the government talks up Uraan Pakistan and a $60bn export ambition. Second, credibility: PTC says levies set above OGRA-notified sale prices erode “tariff finality”, making it harder for firms to hedge, banks to finance, and investors to price sovereign and regulatory risk. In capital-intensive textiles, uncertainty is often more corrosive than the headline tariff.
PTC is urging a reset: regulator-led pricing, protection for high-efficiency cogeneration, removal of cross-subsidies from commodity pricing, and an energy framework explicitly aligned with export competitiveness and macro-stability. The state can tax industry; it cannot tax uncertainty without shrinking the tax base.
