The Petroleum Division is proposing a six-month extension for signing the Pakistan Oil Refining Policy deadline due to some refineries not being prepared to proceed with it yet.
According to Business Recorder, Prime Minister Shehbaz Sharif instructed the Petroleum Division to accelerate the signing of agreements in his presence, although a specific date is still pending. The most recent revisions to the policy, aimed at producing environmentally friendly Euro-V fuels and decreasing Furnace Oil production, were endorsed by the Cabinet Committee on Energy (CCoE) on February 15, 2024, and swiftly approved by the Federal Cabinet.
Under the refinery upgrade, there is provision for a 2.5 percent higher deemed duty on High-Speed Diesel (HSD) and a 10 percent higher duty on Motor Spirit (MS) for a duration of seven years.
Refineries were required to sign Upgrade Agreements to establish an Escrow Account with OGRA and provide a Rs. 1 billion bank guarantee by April 22, 2024. However, several refineries have not yet completed this process.
Some refineries, including PARCO and Cnergyico, are still in the process of finalizing their Upgrade Agreements due to reasons such as conducting feasibility studies and negotiating settlement agreements with the government regarding pending petroleum levies.
