The Special Investment Facilitation Council (SIFC) and the Economic Coordination Committee (ECC) have jointly achieved a long-awaited breakthrough for Pakistan's refining sector. Acting on SIFC's directions, the ECC on Tuesday approved the settlement framework for outstanding petroleum levy dues of M/s Cnergyico PK Limited (CPL), the country's largest refinery.
The framework, prepared in line with SIFC Apex/EC/IC decisions, allows recovery of the principal amount of petroleum levy duty. It also authorises the Petroleum Division to sign the settlement deed with CPL.
CPL's receivables from government entities also remain unresolved. However, officials say SIFC's proactive role and the Petroleum Division's commitment raise hopes that these pending matters will soon be addressed. Industry insiders call the move a game-changer for refinery upgradation. The decision enables CPL to proceed with the execution of its agreement with OGRA under the Brownfield Refining Policy. The policy aims to incentivise investment in modernising existing refineries, ensuring Euro-V fuel standards, and reducing reliance on costly imports.
Last week, all refineries jointly urged the government and SIFC to resolve the outstanding sales tax issue by exempting project-related expenditures from sales tax and customs duties. They noted such exemptions were already available under the Greenfield Refining Policy. Industry leaders argued this step would immediately clear bottlenecks hindering the Brownfield policy's execution and unlock nearly $6 billion in refinery upgrades.
Refineries are hopeful that, after this milestone, the ECC will also approve the tax exemption proposal, which will pave the way for multibillion-dollar projects.
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