Peshawar – UNS: The Chairman of the Khyber Pakhtunkhwa Textile Mills Association (KPTMA), Sikandar Kuli Khan Khattak, condemns the Federal Government’s recently promulgated Off-Grid (Captive Power Plants) Levy Ordinance 2025, calling it a direct assault on the constitutional rights of gas-producing provinces and a death warrant for Pakistan’s industrial sector.
Under the new Ordinance, captive power producers (CPPs) are slapped with an additional levy of Rs. 791 per MMBTU, inflating the cost of natural gas to Rs. 4,291 per MMBTU with further increases of 10% in July 2025, 15% in February 2026, and 20% in August 2026. This unprecedented hike is being imposed across the country, including on provinces like Khyber Pakhtunkhwa that are net exporters of natural gas.
“This is nothing short of economic tyranny,” Mr. Khattak declared. “KP produces gas at around $4 per MMBTU, yet we are being forced to pay over $14 to use it. Which is more than the cost of imported RLNG.”
Mr. Khattak criticized the move as a blatant violation of Article 158 of the Constitution, which mandates that provinces producing natural gas must be given priority in meeting their own energy needs. By imposing an indiscriminate levy, the federal government has trampled constitutional guarantees, betrayed the trust of federating units, and exposed its bias against gas-rich but economically underrepresented regions.
“They tried to impose WACOG to neutralize our natural advantage. That failed due to constitutional resistance. Now they’ve returned through the backdoor with an even worse weapon: this so-called Off-Grid Levy. This time, they are not just equalizing gas prices but penalizing CPPs for using their own resources to generate power. Rather than addressing the overall gas price issue, they’ve singled out industrial consumers who rely on self-generation as the scapegoats for any deficit or rising costs,” he added.
The government’s justification that this is an IMF-mandated reform was dismissed outright by the KPTMA Chairman.
“Let’s be clear: if the IMF is pushing for measures that destroy Pakistan’s productive capacity, then it is our government’s duty to resist, not comply blindly. Hiding behind IMF diktats while strangling local industry is an abdication of responsibility,” said Mr. Khattak.
He further warned that after decimating the power sector under WAPDA, the government now seems determined to turn the gas sector into a graveyard as well. If captive power producers are forced out of the gas system, who will be left to buy this expensive gas? The government is already charging KP industries the highest rates, and then using our payments to cross-subsidize other sectors and regions.
The textile sector, particularly in KP, is already reeling under the weight of rising input costs, supply chain disruptions, and policy uncertainty. Several mills have shut down in recent months. This new levy threatens to wipe out what remains of the industrial base in the province.
The implications are staggering mass unemployment, particularly among low-skilled workers and women, collapse of exports, further worsening the balance of payments crisis, deindustrialization of KP, deepening regional economic disparities and fueling discontent and erosion of investor confidence, both domestic and foreign.
KPTMA now urgently appeals to the Federal Government to immediately withdraw the Off-Grid Levy Ordinance 2025. The only remaining advantage that Khyber Pakhtunkhwa had in terms of its industrial competitiveness has been nullified.
What, then, is the government planning to do with Khyber Pakhtunkhwa, a province that is already economically disadvantaged, landlocked, distant from major markets, and grappling with the consequences of terrorism? By imposing such burdens on the province’s industries, the government risks driving KP’s economy into irreversible decline, worsening unemployment, and further marginalizing the province.
“The government must reconsider this unfair decision and engage in immediate dialogue with provincial stakeholders to come up with an equitable solution.” Mr. Khattak concluded.
