The Cabinet Committee on Energy (CCoE) on Friday asked the Petroleum Division to resubmit in its next meeting the draft of the Pakistan Oil Refinery Policy 2021 for approval after detailed deliberation and consensus with the stakeholders.
The CCoE headed by the Federal Minister for Planning, Development and Special Initiatives Asad Umar, however, approved Power Division’s proposal seeking elimination of the need for generation licences for small-scale RE-based systems (up to 25 kW) for net metering. The measure will greatly facilitate consumers wishing installation of the small-scale solar systems for their homes and businesses and avail the facility of net metering.
During the meeting the Petroleum Division presented the final draft of Pakistan Oil Refinery Policy 2021 aimed at attracting investment in new deep conversion refineries as well as for up-gradation of existing refineries for approval.
After detailed discussions, some of the committee members proposed suggestions to make the policy more effective. And finally it was decided that the Petroleum Division would deliberate on the ideas and resubmit the draft policy in next meeting.
According to Pakistan’s development plan for oil and gas industry, the country has total six operational refineries — Pak Arab Refinery (Parco), National Refinery Ltd, Pakistan Refinery Ltd (PRL), Attock Refinery Ltd (ARL), Byco Petroleum and Enar-Petrotech.
The total annual refining capacity of the country stood in 2019 at 19.36 million tonnes (MMT). Byco Oil Pakistan merged with Byco Petroleum Pakistan Ltd has a total refining capacity of 7.17MMT —the highest one among six. However, Parco dominates the refinery share (crude oil processing) with 31pc, followed by Byco Petroleum Pakistan accounting for 19pc and ARL 18pc.
The 2021 refinery policy reportedly contains significant tax inducements including a 20-year income tax exemption under the Income Tax Ordinance 2001, imposition of no import duties and sales tax on import of crude oil by refineries as of July 1, 2022 for existing refineries investing in either upgradation of the existing refineries or for launching the new deep-conversion refinery projects.
During meeting the Petroleum Division updated the committee on Pakistan Stream Gas Pipeline Project. It highlighted various issues related to project including details of head of shareholders agreement terms, funding arrangements, completion of technical studies and regulatory approvals. The committee, on this, directed the division to ensure timely completion of various actions to avoid further delays.
The Power Division also briefed the committee on issues hampering the progress of transmission line providing interconnection to 660MW LEPCL Power Plant. The committee was informed that all the technical issues had been examined and resolved. It noted that there were no restraining orders from any legal/regulatory forum regarding the execution of the project. The committee, therefore, directed that the project activities be carried out without any delay.
The Power Division also presented the Circular Debt Report from July 2020 to June 2021. The committee noted that the circular debt build-up had substantially reduced in comparison to the previous year. It appreciated the improvement in the recoveries and directed to continue with its efforts for reduction of circular debt.
