The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved a settlement framework for recovering petroleum levy arrears from Cnergyico PK Limited (CPL), outstanding since 2019, and tariff terms for the Machike-Thallian Tarrujabba White Oil Pipeline project with Azerbaijan.
The Petroleum Division has been authorised to formalise the settlement deed, with the ECC stressing that the entire audited levy must be recovered as per the agreed terms.
The meeting was chaired by Finance Minister Senator Muhammad Aurangzeb and attended by Federal Ministers for Power, Petroleum, National Food Security, and Industries & Production, alongside senior officials from relevant ministries.
The ECC also endorsed a mechanism to pass the benefit of levies collected from captive power consumers to electricity grid consumers and approved tariff terms proposed by the Petroleum Division for the Machike-Thallian Tarrujabba White Oil Pipeline project with Azerbaijan, aimed at enhancing bilateral trade and investment.
The Frontier Works Organisation, Pakistan State Oil, and Azerbaijan’s Socar will form a joint venture company to oversee operations of the planned pipeline.
According to the arrangement, the Oil and Gas Regulatory Authority (OGRA) will determine a dollar-based transportation tariff covering the route from Multan to Tarrujabba near Peshawar. Oil marketing companies will be bound to guarantee minimum annual volumes for the pipeline, with any shortfall to be compensated through inland freight equalisation margins. The tariff framework is structured to keep the pipeline as the default means of transportation and ensure maximum capacity use.
A previous proposal by the Finance Ministry calling for reduced liabilities and rationalised payouts was set aside to prioritise the project’s launch. Officials described the decision as critical for both the timely completion of the project and the strengthening of energy cooperation between Pakistan and Azerbaijan.
