A new refinery policy is reportedly in the works, which proposes that the government will not be responsible for the offtake of petroleum products, nor will the government provide the guaranteed rate of return on the equity or ensure an internal rate of return.
However, the policy does allow the refineries to market their products using their channels or other marketing companies or export the products once the local needs have been met. Furthermore, new refineries will be required to comply with a 20-years tax holiday whereas the existing refineries will get a 10 years tax holiday to allow modernization.
All of these developments have been added to the new refinery policy draft. The draft is being circulated among the stakeholders and various state-owned economic analysis entities. After the analysis, the draft will be forwarded to the Economic Coordination Committee for approval.
The news was covered by mainstream media after receiving an update from the Special Assistant to the Prime Minister (SAPM) on Power and Petroleum, Tabish Gauhar, who also informed the media that a Chinese company has shown interest in establishing a deep conversion refinery in Gwadar.
He added that the new refinery will have the capacity to refine 250,000 BPD crude oil. The report also adds that the new policy draft requires the new deep conversion refinery projects to have a minimum of 100,000 BPD of crude oil refining capacity.
The government has also sought investment from China, so as for them to become stakeholders in the PARCO coastal refinery and petrochemical complex. The investment is reportedly sought in the amount of $8-9 billion. The facilities are to be built in Hub, Balochistan.