CCoE gives partial go-ahead to Oil Refinery Policy

ISLAMABAD: The Cabinet Committee on Energy (CCoE) on Monday in principle approved the Oil Refinery Policy 2021, but expressed reservations on some issues and sought response from the Petroleum Division, The News has learnt.

The committee met here with the Federal Minister for Planning, Development and Special Initiatives Asad Umar in chair. The cabinet body questioned the use of incremental revenue, utilisation of deemed duty by refineries and the collection of revenue and its utilisation if the government allowed 10 percent tariff protection.

The upfront tariff has also not been given go ahead so far, as the committee had raised questions on it. It is to be noted that the Petroleum Division had proposed 10 percent tariff protection for the existing refineries to generate revenue for up-gradation projects.

Earlier, Petroleum Division had presented a refinery policy in the last meeting of CCoE. However, it had directed the Petroleum Division to clarify the mechanism of investment of incremental revenue by refineries for up-gradation projects.

CCoE detailed the oil refinery policy’s most important elements. It further stated the proposed policy would give incentives for existing refineries to upgrade to produce Euro-V-specified products. It would also use economic incentives to entice potential investors to build new, cutting-edge, deep conversion refineries.

The Power Division submitted a report of the Implementation Committee on the ratification of the IPPs Agreement, under the 2002 Power Policy. After a detailed discussion, the Committee approved the final report of the Implementation Committee and directed the Power Division to proceed with the payments of all 11 IPPs as per the signed agreement except a company that was under NAB investigation.

Due to the limited availability of natural gas during winters, the consumers need alternative affordable resources for meeting the heating requirements. Hence the winter incentive package for electricity consumers from November 1, 2021 to February 28, 2022 was submitted by Power Division and approved by CCoE. The CCoE directed the Power Division that K-Electric consumers should also be included in this package. The committee also directed the Petroleum Division to submit an inverse gas pricing mechanism for the same months within this week.

The meeting was attended by the Minister for Finance, Minister for Energy, Minister for Maritime Affairs, Minister for Railway, SAPM on Power, Petroleum & Revenue, and Adviser for Commerce and Investment to the Prime Minister. Representatives of regulatory authorities and senior officials of ministries/divisions also participated in the meeting.