Refineries rethink upgrades despite extension

KARACHI: The federal budget for the current fiscal year has prompted refineries to reassess the feasibility of their upgradation projects, despite a six-month extension approved by the Cabinet Committee on Energy (CCoE) on Friday.

Chairperson of the Oil Companies Advisory Council (OCAC) and CEO of Attock Refinery Adil Khattak commented on the extension, describing it as a positive step. However, he highlighted concerns over measures introduced in the budget that are impacting refinery operations.

“One significant issue is the exemption of petroleum products from sales tax, which prevents refineries from recovering a substantial portion of input taxes paid on purchases and services,” Khattak explained. “Also, the imposition of an additional 2.0 per cent customs duty on imported equipment will escalate project costs.”

Khattak emphasized that refineries have urgently requested a meeting with the minister for petroleum to address these challenges. He underscored the importance of government support to ensure the successful implementation of the Refineries Policy, which was developed over several years.