ISLAMABAD: The Cabinet Committee on Energy (CCoE), chaired by Prime Minister Shehbaz Sharif, has extended the deadline for local refineries to sign implementation agreements (IAs) with the Oil & Gas Regulatory Authority (OGRA) for their $5-6 billion upgrade projects by an additional six months.
This extension, granted under the amended brownfield refineries’ policy of 2023, aims to accommodate the country’s two largest refineries – Pak-Arab Refinery Company (PARCO) and Cnergyico – which contribute over 50% of the nation’s refining output. The new deadline allows these refineries more time to finalize their upgrade plans.
Meanwhile, other local refineries, including Attock Refinery Limited (ARL), Pakistan Refinery Limited (PRL), and National Refinery Limited (NRL), have been permitted to sign their IAs and commence investments totaling approximately $3 billion in their upgrade projects over the next seven years.
The original deadline for signing the IAs was April 22, 2024. However, PARCO required more time to submit its upgrade project due to pending decisions by its Board of Directors, while Cnergyico needed to settle dues amounting to Rs47.5 billion related to petroleum levies with the Federal Board of Revenue (FBR) and the Finance Division.
The CCoE has instructed the relevant authorities to develop a comprehensive strategy involving all refineries for the upgrade projects. This policy aims to ensure the production of environment-friendly Euro-V fuels and reduce furnace oil output.
The delay in the refining policy, which has taken over four years to finalize, has resulted in significant financial losses for the country. Despite this, ARL, NRL, and PRL have expressed readiness to proceed with their agreements, potentially paving the way for the total investment to reach $6 billion once PARCO and Cnergyico complete their preparations.
The government emphasizes the importance of attracting foreign investment but acknowledges the necessity of addressing the concerns of both existing foreign and local investors to foster a conducive investment environment.
Story by Khalid Mustafa
