ISLAMABAD: The Petroleum Division could not address oil refineries obstacles by November 10th, as mandated by the Special Investment Facilitation Council (SIFC). This is crucial for enabling the signing of upgrade agreements under the 2023 Brownfield Refinery Policy, sources said.

During the working group meeting of the SIFC held on November 3, oil refineries raised concerns over sales tax exemptions, petroleum product smuggling, and Oil and Gas Regulatory Authority’s approval for high-speed diesel imports.

These issues, Oil Companies Advisory Council (OCAC) argued, were hindering the signing of plant upgrade agreements and causing an annual foreign exchange loss of $1 billion. The SIFC instructed the Petroleum Division to resolve these issues to enable the production of Euro-V fuels.

Adverse impact of budget on refineries policy: PD and FBR preparing a viable solution

According to sources, in the SIFC’s working group on downstream policy, the OCAC raised multiple concerns, including the financial strain due to unresolved tax issues, the impact of rampant petroleum product smuggling, and the uncontrolled import of high-speed diesel (HSD).

The OCAC had emphasised that the resolution of these issues is crucial to the viability of local refineries and the successful signing of the Brownfield Refinery Policy 2023, which aims to modernise Pakistan’s refinery sector

The SIFC had directed the Petroleum Division to prioritise resolving the sales tax exemption issues impacting refinery profitability.

According to sources, the SIFC had also underscored the need to support OGRA’s efforts to control smuggling and improve regulatory compliance in collaboration with provincial and local administrations.

The SIFC had further instructed the Petroleum Division to work closely with the Finance Division and the FBR to address the tax concerns affecting refineries by the November 10 deadline.

Copyright Business Recorder, 2024