Islamabad January 12 2022: Cabinet Committee on Energy (CCoE) to consider draft of Pakistan Oil Refining Policy 2021 in its meeting to be held tomorrow.
The other two items on CCoE agenda is approval of Revised Circular Debt Management Plan and Circular Debt Report for November, 2021.
The meeting will be chaired by minister for planning, Development and Special Initiatives.
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According to the draft of new refining policy draft 2021, the new legislation seeks extension up to December 31, 2022, for availing tax holiday under clause 126B of Finance Act 2021-22, to obtain government approval for setting up new deep conversion refineries from existing deadline of December 31, 2021.
Government has already abolished sales tax on import of petroleum crude products that was initially part of this policy.
It also proposes that incremental revenue from tariff protection, meant for sustainability of the refining sector, will contribute up to 30 percent of the project cost and refineries will add debt/equity (minimum 70 percent) for remaining cost of the project at their own balance sheets. Earlier, the tariff protection envisaged at 40 percent.
The policy also seeks refinement of Special Reserve account mechanism to ensure upgradation/modernisation with no withdrawal of funds from Special Reserve account till award of EPC (engineering, procurement and construction) contracts.
