Govt mulls sales tax exemption on refinery equipment imports

KARACHI: The government is considering granting a sales tax exemption on the import of equipment and machinery required for the upgradation of refineries under the Brownfield Refinery Policy.

Minister for Petroleum Ali Pervaiz Malik, who held meetings with various stakeholders in the oil sector, has indicated that such an exemption may be on the cards, noting that imposing a sales tax on petroleum products would be difficult due to its inflationary impact. “As the IMF demands a uniform sales tax regime, it would be challenging for the government to comply without raising domestic petroleum prices,” a meeting participant quoted the minister as saying.

The minister reportedly assured stakeholders that while the exemption on petroleum products may be withdrawn in the upcoming budget, it is highly unlikely that any new sales tax will be levied on petroleum products sold in the domestic market.

According to a press release from Pakistan State Oil (PSO), Malik visited the PSO House on Thursday as part of a strategic outreach to key players in the petroleum sector. During the visit, he met with the chairperson of PSO’s Board of Management Asif Baigmohamed and discussed areas of mutual business interest.

The minister also held a series of high-level meetings focused on strengthening coordination and ensuring operational excellence across the sector. He reviewed PSO’s performance, supply chain resilience and automation initiatives and lauded the company’s role in maintaining a steady fuel supply nationwide. He also appreciated PSO’s modernisation efforts and its shift towards renewable energy and emerging segments of the energy market.

Listening attentively to the challenges faced by PSO, the minister assured the company of the government’s full support. He reiterated the government’s commitment to ensuring reliable, sustainable and affordable energy for consumers.

In a separate engagement, Malik met with representatives of the Oil Companies Advisory Committee (OCAC), including Secretary General Syed Nazir Abbas Zaidi, Wafi Energy Pakistan CEO Zubair Shaikh, Managing Director of Pakistan Refinery Limited Zahid Mir, and PSO Chief Supply Chain Officer Abdus Sami. Discussions revolved around industry-wide challenges, regulatory changes and the need for greater policy alignment to ensure a stable and efficient energy supply chain.

The minister also held a session with a delegation from the Petroleum Dealers Association, led by Chairperson Abdul Sami Khan. Operational challenges and concerns over dealer profit margins were raised during the meeting.

Malik assured dealers that their legitimate concerns would be addressed through dialogue. He said: “The government is fully committed to steering [the] energy sector towards greater resilience, sustainability and innovation. Our priorities include streamlining operations, addressing systemic challenges and creating a balanced ecosystem that serves consumers and supports economic stability.” He added: “Enhancing fuel quality, reducing emissions, and advancing the transition to clean energy are central to this vision. In the best interests of the country, all stakeholders must work together with a shared commitment to progress. Together, we can build a modern energy sector that meets the evolving needs of our nation.”