KARACHI: The Oil Companies Advisory Council (OCAC) has voiced strong concern over the government’s continued General Sales Tax (GST) exemption on petroleum products in the newly announced Finance Bill, warning that it endangers a planned \$6 billion investment under the Pakistan Brownfield Oil Refining Policy 2023.
In a letter to the petroleum minister, the OCAC acknowledged the government’s temporary relief allowing partial recovery of GST impact through the Inland Freight Equalisation Margin (IFEM) effective May 16, 2025. However, it deemed the measure inadequate and unsustainable.
The council noted that despite repeated industry appeals and assurances given by the minister during a recent Karachi visit, the GST exemption on petrol, high-speed diesel, kerosene, and light diesel oil remains intact. This, it said, is placing immense financial strain on the downstream oil sector, damaging investor confidence and contradicting policy goals.
The OCAC urged immediate withdrawal of the exemption and proposed a sales tax framework that enables full input tax adjustment, calling it the only long-term solution to ensure tax neutrality and sectoral stability.
Story by Tanveer Malik
