ISLAMABAD: The Special Investment Facilitation Council (SIFC) has instructed the Petroleum Division (PD) to resolve the sales tax exemption issue by November 12, to pave the way for a $6 billion refinery upgrade project. This issue, stemming from the Finance Bill for FY25, has stalled crucial upgrade investments by local refineries, according to a senior Energy Ministry official.
SIFC emphasized that consultations between the Petroleum Division, the Finance Ministry, and the Federal Board of Revenue (FBR) are essential to address the sales tax exemption on petrol, diesel, kerosene, and light diesel oil, which currently claims 80-85% of input tax. Without a resolution, existing refining operations face challenges, and planned upgrades become unviable.
The seven-year upgrade would produce Euro-V compliant petrol and diesel while reducing furnace oil production. The SIFC also directed PD to seek an extension for refineries to sign Implementation Agreements (IAs) with OGRA, a necessary step for the project to proceed.
The meeting, chaired by Dr. Jehanzeb Khan, Special Assistant to the Prime Minister, included key stakeholders from OGRA, the Petroleum Division, and the Oil Companies Advisory Council (OCAC).
Story by Khalid Mustafa
