ISLAMABAD: The Petroleum Division missed a critical deadline set by the Special Investment Facilitation Council (SIFC) to address tax exemptions and extend the refinery upgrade agreements.
The deadline, initially set for November 10, 2024, was part of a key directive aimed at supporting Pakistan’s refinery sector amid concerns about smuggling and tax issues.
Despite the urgency conveyed during an SIFC meeting on October 22, chaired by Dr. Jehanzeb Khan, Special Assistant to the Prime Minister, directives to extend refinery upgrade agreements and resolve key sales tax issues remain unaddressed.
The October meeting, attended by high-level officials from the Oil and Gas Regulatory Authority (OGRA), Federal Board of Revenue (FBR), and executives from Pakistan’s leading refineries, highlighted severe challenges facing the sector, including rampant petroleum smuggling, burdensome tax issues, and unchecked imports of high-speed diesel. Adil Khattak, Chairman of the Oil Companies Advisory Council, emphasized that addressing these issues is essential to preserving refinery viability and implementing the Brownfield Refinery Policy 2023.
OGRA was tasked with overseeing the elimination of illegal petroleum outlets and ensuring strict quality controls, while the FBR was directed to create a timeline-based plan for resolving outstanding tax refunds for Oil Marketing Companies. Additionally, the Petroleum Division was assigned to support OGRA’s anti-smuggling efforts and work with FBR to alleviate financial pressures on the refinery sector.
Industry stakeholders now express concern that delays may further destabilize refinery operations, as the lack of progress jeopardizes Pakistan’s energy security and domestic production capacity.
