Caretakers concede to refineries’ demands

Conceding to the key demands of the private sector oil refineries, the Cabinet Committee on Energy (CCoE) on Tuesday approved amendments to the Brownfield Refineries’ Policy to ensure the upgrade of the existing refineries within six years capable of producing Euro-V petrol and diesel, with minimal production of low-quality fuel like furnace oil. The meeting presided over by Minister for Petroleum and Power Muhammad Ali accepted four major demands of the four private sector refineries — Attock, National, Pak-Arab and Cynergico — stalling the implementation of refining policy since August 22, 2023, the date of its notification. Pakistan Refinery Ltd ­— a government-owned entity immediately signed the contract last year and started project implementation. These amendments mean a continuation of 7.5pc deemed duty on locally refined products for 20 years (instead of six years) or till the deregulation of oil pricing whichever is earlier in line with similar facilities to investments for new refineries. Also, the upgrade agreement between the Oil and Gas Regulatory Authority (Ogra) and the refineries would be signed within 60 days instead of the previous deadline of one month. Moreover, the capping on funding from an escrow account for the refinery upgrade project on used equipment has now been increased to 24.5pc from 22pc in the August 2023 policy. This incentive is slightly lower than the 27.5pc discount for new equipment. Moreover, the policy implementation committee would now comprise federal secretaries for petroleum, finance and law.