(Digital Itla) To reduce reliance on imported fuel and boost local production of petrol and diesel, the government has taken a major step.
According to ARY News, the path has been cleared for a $6 billion investment in the refining sector, and the government has approved the Oil Refining Policy to reduce dependency on imported fuel.
The Pakistan Oil Refining Policy was prepared in light of recommendations from relevant bodies, including the SIFC. The policy aims to modernize older refineries, increase the production of petrol and high-speed diesel, significantly reduce furnace oil production, and improve fuel quality.
The new policy will help enhance energy security. A 7-year package will be provided to refineries to produce Euro 5 standard fuel, while refineries will sign agreements with OGRA within 90 days of the policy's approval.
The new policy also includes provisions to attract global investment into the refining sector. Refineries are protected under the policy from tax adjustments, environmental legislation, and foreign exchange regulations.
Refineries will be allowed to open foreign currency accounts to repay foreign loans. Oil refineries will maintain a 14-day stock of crude oil.
Refineries dependent on imported crude oil will maintain an additional five-day stock, while refineries will have to forgo the previous incentive package to opt for the new one.
The new policy recommends no disciplinary action against refineries that fail to complete upgrades within the specified timeframe, alongside a proposed 10% regulatory duty on the import of petrol and diesel.
Refineries must clear outstanding balances for the Petroleum Levy and Climate Support Levy prior to receiving the incentive package. A system of monitoring, implementation, and accountability will be strengthened through legally binding upgrade agreements with OGRA.
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