ISLAMABAD: Three more refineries have signed upgradation agreements with the Oil and Gas Regulatory Authority (OGRA), bringing the total to four. Pakistan Refineries Limited (PRL) had already signed the pact, while PARCO is still finalizing its study to determine the scope of its upgradation project.
The three refineries that signed the agreements are Attock Refinery Limited (ARL), Cnergyico PK Limited, and Pak Refinery Limited. These refineries have also called for a resolution of the Goods and Services Tax (GST) issue, particularly at a time when the IMF Review Mission is in Islamabad. Resolving the longstanding GST issue is essential for securing the IMF’s approval.
In a joint letter to OGRA Chairman Mansoor Khan, the CEOs of the three refineries referred to a letter dated November 7, 2024, sent to the Petroleum Division. The letter requested input on the reduction of the deemed duty on High-Speed Diesel (HSD) under Clause 6.1.3.5 of the Brownfield Refining Policy. This clause applies to refineries that have not yet signed upgradation agreements with OGRA, as well as to requests for an extension of the policy’s deadline for signing such agreements.
The refineries emphasized that they have not delayed in executing the upgrade agreements within the timelines stipulated by the Brownfield Refining Policy. They are committed to upgrading their refineries and have already finalized the Upgrade & Escrow Account Agreements with OGRA. However, the total investment of over $6 billion required for these upgrades hinges on the urgent resolution of the GST issue on petroleum products before they can finalize the agreements.
Although there have been positive discussions with the government on this matter, such as the recent meeting of the Special Investment Facilitation Council (SIFC) on October 22, 2024, where representatives from the refineries and the Ministry of Energy participated, the issue remains unresolved and needs to be addressed in the best interest of the country.
The refineries are looking to OGRA and the Ministry of Energy for support and understanding, particularly in resolving the GST issue and in securing an extension of the deadline for signing the upgradation agreements under the Brownfield Refining Policy.
