January 03, 2025 (MLN): To further discourage the utilization of captive gas units, an initial levy of 5% will be imposed on the base price of Rs4,500 per MMBtu, sources informed Mettis Global.

This development was unveiled during a meeting held today with Finance Minister Senator Muhammad Aurangzeb to address the issue of captive power plants.

The meeting aimed to determine the gas price at which the spark spread for captive power units would achieve grid parity.

The levy will increase to 10%, raising the tariff to Rs4,950 per MMBtu, and will continue to incrementally rise, reaching up to 20%.

The objective is to align captive gas pricing with broader energy policy goals and incentivize a transition to grid-based energy consumption.

It was communicated to the Minister that grid parity is achieved at a gas price of Rs4,500 per MMBtu.

Consequently, this rate was established as the base price for captive gas units.

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Posted on: 2025-01-03T21:56:12+05:00