PM removes hurdles to refinery policy

Prime Minister Shehbaz Sharif on Tuesday approved amendments to the Brownfield Refinery Policy, removing key bottlenecks that had delayed its implementation and paving the way for billions of dollars in investment to modernise Pakistan's refining sector. The approval came during a meeting of the Cabinet Committee on Energy (CCoE), chaired by the prime minister, which endorsed an implementation framework for the Pakistan Oil Refining Policy for Up-gradation of Existing (Brownfield) Refineries, 2023. A major relief for the industry came in the form of a general sales tax (GST) waiver on the import of plant, machinery and equipment required for refinery upgrade projects.

Industry officials had identified the withdrawal of tax concession following the Finance Act 2024 as one of the principal hurdles to implementing the policy. Under the approved framework, all refineries will be required to sign Upgrade Agreements with the government within 90 days. Once the agreements are executed, the refineries will have seven years to complete their projects, enabling the production of Euro-V compliant fuels while significantly reducing furnace oil output.

Officials said the decision provided a long-awaited clarity to investors and was expected to unlock billions of dollars in planned investments that had remained on hold due to uncertainty surrounding the policy implementation. During the meeting, PM Sharif directed the Petroleum Division and other relevant ministries to ensure that all existing refineries undertake plant upgrades under the brownfield policy and take every possible facilitation measure to help implement the projects within the stipulated timeframe. The prime minister also instructed officials to organise investment roadshows in Saudi Arabia and Qatar to attract foreign investment into Pakistan's refinery modernisation programme.

He stressed that the government would extend full support to facilitate investment in the downstream petroleum sector and ensure the timely execution of upgrade projects. The upgrading programme is aimed at improving fuel quality, increasing the production of high-value petroleum products and reducing dependence on imported refined fuels while bringing domestic fuel specifications in line with international environmental standards. The CCoE decision follows months of consultations among the Petroleum Division, the Oil and Gas Regul…