Refinery tax relief sought from ECC

The petroleum division is set to move a summary to the Economic Coordination Committee (ECC) to amend the oil refinery policy, aiming to remove sales tax on the import of machinery and address the issue of operational sales tax, according to an official statement.

Federal Minister for Petroleum Ali Pervaiz Malik chaired a high?level meeting at the petroleum division with the chief executives (CEOs) and managing directors (MDs) of the country's oil refineries to review and accelerate the operationalisation of the Brownfield Upgradation Refinery Policy.

At the outset, the minister underscored the strategic importance of the refining sector and emphasised that local refineries are critical national assets for ensuring uninterrupted fuel supply and strengthening Pakistan's energy security. He noted that the ongoing regional situation arising from the US?Iran conflict has further highlighted the urgency of reducing reliance on external supply chains and ensuring maximum domestic refining flexibility and capability.

The minister stressed that timely upgradation of existing refineries is essential to enhance production capacity, improve efficiency and ensure the supply of cleaner Euro?V fuels in line with international standards. He stated that refinery upgradation will enable Pakistan's refineries to produce Euro?V compliant fuels, contributing significantly towards improved environmental outcomes, better engine performance and reduced emissions.

The minister observed that despite the issuance of both refining policies in 2023, progress on implementation has remained stalled. He emphasised that removing the bottlenecks is crucial for moving forward with refinery modernisation and attracting long?term investment in the sector.

During the meeting, the refining policies and the upgradation agreement template were reviewed in detail to ensure their effective and timely operationalisation. The CEOs and MDs highlighted key challenges and proposed practical measures for resolution. They stated that they had full confidence in the petroleum division's efforts.

The exemption of sales tax on petroleum products was identified as the key issue affecting the viability of upgradation projects. The minister directed that a comprehensive proposal addressing these challenges be finalised and submitted to the relevant forum before the finalisation of the upcoming budget, so that the refining policies may be implemented without delay.

The minister reaffirmed the government's commitment to supporting refinery upgradation as a national priority and stated that modernising Pakistan's refining infrastructure is essential for ensuring energy security, promoting cleaner fuels and strengthening the country's resilience against external disruptions.

The meeting was attended by the secretary of petroleum, additional secretary (policy), director general (oil), the CEO of Pakistan Refinery Limited, the MD of PARCO, CEO of Attock Refinery Limited, CEO of Cnergyico and the CEO of National Refinery Limited.