The Cabinet Committee on Energy (CCOE) has decided to consult the United Arab Emirates (UAE) for a planned $1.3 billion investment in the Pak Arab Refinery Limited (Parco), focusing on installing a hydrocracker unit to convert furnace oil into petrol and diesel.
According to a news report, during a recent CCOE meeting, Pakistan’s economic managers emphasised the need to send a delegation to the UAE for discussions. The committee also considered granting an extension for refineries to sign agreements for plant upgrades under the new refinery policy.
Three refineries, namely Attock Refinery Limited, National Refinery Limited, and Pakistan Refinery Limited, are already prepared to sign such agreements. Following this, a delegation will be sent to the UAE for further consultations.
Parco is updating its feasibility study, and its board of directors will decide on the planned upgrade within the next five to six months. Additionally, a settlement agreement between Cnergyico PK and the government is being negotiated for the payment of outstanding petroleum levies.
Parco, a joint venture between the government of Pakistan and the UAE, has been operating at maximum capacity, particularly in recent months, despite challenges such as cross-border diesel smuggling.
The government’s timely action against smuggling has led to increased demand for petroleum products. Parco’s operation at full capacity is crucial for the economy, saving foreign exchange and ensuring steady petroleum product supply.
Support from the energy ministry and the Special Investment Facilitation Council (SIFC) has been instrumental, and industry officials note a steady increase in petroleum product demand alongside improving economic indicators.
The Petroleum Division briefed the CCOE, noting that the committee had considered its summary on January 25, 2024, with the federal cabinet ratifying the decision on February 15, 2024. Consequently, the amended “Pakistan Oil Refining Policy for Up-gradation of Existing/Brownfield Refineries 2023” was notified for implementation by the Oil and Gas Regulatory Authority (Ogra) and the refineries.
The CCOE also reviewed and approved the proposal titled “Pakistan Oil Refining Policy for Up-gradation of Existing/Brownfield Refineries 2023 – Extension of Deadline for Signing Upgrade Agreements.”
