Govt locks industry officials out of refinery policy meeting

KARACHI: The government on Wednesday locked country’s refining sector officials out of a meeting, called to discuss draft Pakistan Oil Refining Policy 2021, a move stakeholders dubbed as a delaying tactic to gain time for probably cutting some incentives down.

The meeting, chaired by Federal Minister Energy Hammaz Azhar, deliberated the draft of the refining policy, which has been lying in limbo for quite some time. The top management of five refineries was invited to join the meeting and was supposed to give their valuable inputs for the draft policy. However, they were not consulted despite being asked to remain available for the meeting online.

“They didn’t invite us to join the meeting, a top executive of a refinery told The News.

According to sources, the draft of refining policy was not on the agenda of Cabinet Committee on Energy (CCoE), scheduled for Thursday. “Though, not a part of agenda of CCoE, but it might be tabled if the government wanted,” sources said.

Pakistan refining policy is yet to be tabled in CCoE for approval despite being made part of the agenda of its meeting in December last year. Sources in the refining sector said there were certain issues, which were not being sorted out so far.

“The government wanted to review some of the incentives in the draft of the policy,” sourced said.

According to insiders, refining policy has been facing hitches since its last revision by Ministry of Energy.

Departure of Nadeem Babar as Special Assistant to Prime Minister and then Secretary Petroleum Arshad Mahmood’s transfer slowed down the pace of its approval process.

Sources said the draft was finalised, but the government’s green-signal was pending.

CCOE had it on its agenda in the beginning of last month, but the meeting was postponed and then the federal secretary petroleum was transferred.

According to the draft of the policy, the new policy seeks extension up to December 31, 2022, for availing tax holiday under clause 126B of Finance Act 2021-22, to obtain government approval for setting up new deep conversion refineries from existing deadline of December 31, 2021. The new policy also says there shall be no duties and sales tax on import of crude oil, being the main raw material of refineries, from July 1, 2022.

The new policy also suggests Oil and Gas Regulatory Authority (OGRA) to monitor project progress to ensure the proceeds are used only for upgradation and refineries provided bank guarantee worth Rs500 million till the start of commercial operations.

There will be no dividend payment and adjustment of losses permissible from Special Reserve Account, reads the policy draft.

Under the current state of affairs, the policy proposed upgrade of existing five refineries and attracting investment for one new refinery with the capacity of 300,000 barrels/day.