The International Monetary Fund (IMF) has approved a significant modification in Pakistan’s gas levy pricing formula, allowing a reduction of up to 60% for industrial consumers relying on gas for in-house power generation. This decision, announced on April 28, 2026, aims to alleviate the financial burden on industries while ensuring no adverse impact on the national grid’s electricity demand.
The approval is conditional, requiring that the reduction does not lead to decreased electricity withdrawal from the grid. Should power demand decline, the government is mandated to increase the gas levy to 20% a month before the scheduled time in August 2026. This decision follows a request by Petroleum Minister Ali Pervaiz Malik during the third review talks with the IMF last month.
Under the new arrangement, the levy will be calculated using a weighted average of peak and off-peak B3 industrial rates, replacing the previous peak-only rate. This change is projected to lower the levy from Rs1,303 to Rs522 per mmBtu, offering significant relief to industries. However, the IMF has rejected requests to freeze the 15% additional gas levy and exempt efficient plants.
The context of this decision traces back to financial losses faced by Sui companies, which reported Rs104 billion in losses due to policy missteps and consumer shifts to alternative energy sources like solar. The IMF emphasizes the levy as a tool to discourage inefficient gas usage in captive plants, which have historically been criticized for their low efficiency levels.
Looking forward, the IMF’s decision is expected to influence Pakistan’s industrial sector significantly, with potential adjustments required if electricity demand fluctuates. The government’s ongoing discussions with the IMF highlight the complex interplay between economic policy and energy consumption.
Published in SouthAsianDesk, April 29, 2026
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