PM to decide refinery policy fate today

The Cabinet Committee on Energy (CCoE) is set to review amendments to the Brownfield Refinery Policy that could determine the future of billions of dollars in refinery upgrade investments, with Prime Minister Shehbaz Sharif expected to address key implementation hurdles.

 

The proposed changes follow consultations with the Oil and Gas Regulatory Authority (OGRA), the Finance Division, and industry stakeholders. However, refiners have raised concerns over a proposal to retrospectively reduce deemed duty protection from 7.5% to 5%, arguing that delays in signing Upgrade Agreements were caused by administrative processes rather than the industry.

 

Refinery representatives say they accepted the draft agreements in 2024 and were awaiting the government's formal signing process. They warn that reducing incentives could undermine planned investments in refinery modernisation, Euro-V fuel production, and improvements to Pakistan's fuel mix.

 

The Petroleum Division has proposed limited amendments to operationalise the policy while recommending a committee to finalise the Upgrade Agreement template. Meanwhile, OGRA has expressed reservations about remaining a signatory to the agreements, maintaining that its role should remain regulatory rather than contractual.

 

The refining industry is urging the government to retain the original incentive framework, saying policy consistency is essential to unlock long-delayed investments and strengthen Pakistan's energy security.