KARACHI: Three major refineries—Attock Refinery, National Refinery, and Cnergyico Refinery—have urged the Oil and Gas Regulatory Authority (OGRA) to address pending sales tax issues to facilitate $6 billion in upgrade projects.
In a joint letter to OGRA, the refineries emphasized their adherence to timelines under the Brownfield Refining Policy, clarifying that delays in signing upgrade agreements were not on their part. This comes in response to OGRA’s proposal to reduce the deemed duty on high-speed diesel (HSD) for refineries that have yet to sign agreements, as outlined in Clause 6.1.3.5 of the policy.
The refineries acknowledged finalizing upgrade and escrow account agreements with OGRA but stressed that unresolved sales tax on petroleum products poses a significant hurdle. They noted that resolving this tax issue is essential before agreements can be executed, given the scale of investments required.
Despite positive discussions with the government, including the Special Investment Facilitation Council (SIFC) meeting on October 22, 2024, the matter remains unresolved. The refineries requested a revised extension of the policy deadline and sought OGRA and the Ministry of Energy’s assistance in expediting the resolution.
This appeal follows Pakistan Refinery Limited’s recent signing of an upgrade agreement with OGRA, while Pak-Arab Refinery (PARCO) is still finalizing its upgradation study. The refineries stressed that resolving tax and policy challenges is vital to progressing with the upgrades, which are crucial for strengthening Pakistan’s energy sector and economic stability.
Story by Tanveer Malik