Islamabad, Pakistan – Web Desk: Prime Minister Shehbaz Sharif has approved key amendments to the Pakistan Oil Refining Policy 2023, aiming to upgrade the country’s refineries, reduce reliance on imported fuels, and shift toward environmentally cleaner Euro-5 fuels .
The decision was made during a meeting of the Cabinet Committee on Energy (CCoE) at the Prime Minister’s House.
Policy Goals and Objectives
The amended policy is intended to encourage significant investment in Pakistan’s refining sector. Key targets include:
- Increasing Production: Boosting production of deficit products like petrol and diesel while reducing the output of furnace oil .
- Attracting Investment: The upgrades are expected to attract an estimated $5 to 6 billion in investment .
- Cleaner Fuels: Modernizing plants to produce Euro-5 compliant fuels, aligning with international environmental commitments and reducing air pollution .
Key Features and Incentives
The revised policy provides a 10% tariff protection, or ‘deemed duty,’ on motor gasoline and diesel for seven years to support refineries undertaking upgrades . A portion of these duties will be deposited into an escrow account, from which refineries can withdraw funds for their projects. The withdrawal limit is up to 27.5% of the project cost for new equipment, enabling them to finance their modernization .
Government’s Stance
Prime Minister Shehbaz Sharif described the refinery upgrades as a “critical need” and a key pillar of Pakistan’s comprehensive energy security framework . He emphasized that the policy will ensure timely and effective implementation, with a focus on reducing dependence on imported fuel and providing cleaner, environmentally friendly fuel to the public .
The government has also directed the Petroleum Division to hold roadshows in Qatar, Saudi Arabia, and other Gulf countries to promote the amended policy and attract foreign investment for Brownfield refineries.
