ISLAMABAD: Oil Companies Advisory Council (OCAC) has asked the Petroleum Division to devise a separate policy for Oil Marketing Companies (OMCs) to address their issues, specifically with regards to investment in infrastructure, periodic review of OMCs margins, phased deregulation etcetera.
OCAC chief executive officer (CEO), in a letter dated August 26, 2021, to petroleum secretary, floated the suggestion of a separate policy for OMCs mainly to address their issues and also assured full cooperation and support of OCAC in this regard.
“We feel that a separate policy is required for oil marketing companies to address their issues, specifically with regards to investment in infrastructure, periodic review of OMCs margins, phased deregulation etc. Should you need any inputs, we are available to extend our full support to the Ministry of Energy, Petroleum Division for the same,” said the OCAC letter.
On behalf of downstream industry OCAC CEO Syed Zawar Haider, in his letter to Secretary Petroleum Dr Arshad Mahmood, also appreciated the government’s efforts to address the industry issues as well as its serious commitment to developing a consistent policy framework for meeting ongoing and upcoming challenges to ensure proper infrastructure planning given the growing demand of petroleum products.
He said that the incentives for the refining sector have a complementary impact on other sectors of downstream industry, that is the consequent investments and upgrades will strengthen the overall industry in terms of logistic advantage (by increasing local supplied) increasing storage capacity, reducing demurrage costs and reducing working capital requirements for OMCs.
“As you are aware, the oil industry has been facing various challenges over the past few years which were brought to the attention of relevant forums/authorities by CACA on numerous occasions,” said the OCAC letter.
Regarding draft Refining Policy 2021, the OCAC chief’s letter said that it has adequately addressed the need to attract greenfield and brownfield investments in the refining sector. The policy incentivises investors by providing income tax holidays, tariff protection and customs duty exemption on import of plant/machinery while also ensuring commitment for upgrades from the refineries.
Expressing confidence in the draft Refining Policy 2021, OCAC said that the proposed Refining Policy 2021 would bring about a new era for refining, eventually cascading its positive effects to other sectors of the economy and lead Pakistan further on the path of economic growth.
“The refining sector plays a critical role in the energy supply chain of the country and is of great importance to national security. Keeping in view the growing demand for petroleum products, there is an urgent need for investments in this sector to improve refining capacity, thereby, moving a step closer towards self-sufficiency in product supplies,” said the OCAC letter.
