The Petroleum Division wants to delay the deadline for signing the Pakistan Oil Refining Policy by six months as some refineries are not yet ready to go ahead with it.
Prime Minister Shehbaz Sharif had directed the Petroleum Division to expedite the signing of the agreements in his presence but a date is yet to be set, reported Business Recorder.
Latest amendments to the policy to produce environmentally friendly Euro-V fuels and reduce the production of Furnace Oil were approved by the Cabinet Committee on Energy (CCoE) on February 15, 2024, and soon okayed by the Federal Cabinet.
The refinery upgrade allows a 2.5 percent higher deemed duty on High-Speed Diesel (HSD) and a 10 percent higher duty on Motor Spirit (MS) for seven years.
Refineries were supposed to sign the Upgrade Agreements to open an Escrow Account with OGRA and provide a Rs. 1 billion bank guarantee by April 22, 2024, but many have failed to do so.
Some refineries, including PARCO and Cnergyico, are still in the process of finalizing their Upgrade Agreements due to reasons like conducting feasibility studies and negotiating settlement agreements with the government on pending petroleum levies.
Due to this, the Energy Ministry has proposed a six-month extension for signing the Upgrade Agreements.
