According to Musadik Malik, the Minister for State on Petroleum, Pakistan is preparing to introduce an oil refining policy for existing refineries, known as brownfield sites, within the next week or two. The policy, in its final stage, aims to incentivize the refineries to upgrade their outdated machinery with more advanced technology.
The policy is designed to provide various incentives to refineries as Pakistan’s demand for petroleum products is expected to increase to 33 million tons over the next nine years. In a significant move, the government has decided to offer offshore sites for oil and gas exploration and development to investors, marking the first time in several decades. Additionally, a new Greenfield oil refining policy has been recently approved to attract foreign investment to the country’s petroleum sector. This policy aims to facilitate the establishment of a new deep-conversion refinery with a daily processing capacity of 400,000 barrels of oil.
The minister clarified that Pakistan’s greenfield policy for new refineries sets a strict timeline, requiring private investors or the government to achieve “financial close” within five years to benefit from incentives. This approach ensures timely progress in refinery establishment. Energy security was highlighted as a crucial aspect of Pakistan’s economic development, and the government plans to offer tax exemptions and incentives to encourage foreign investors.
The locations where the new refineries will be established will be designated as special economic zones (SEZs), providing favorable conditions for investors. To protect their interests, investors in oil refining projects will be covered under the Foreign Investment Act 2022. The minister noted that the current local refineries cater to approximately 10 to 11 million tons per year of the nation’s oil requirements, with an annual demand for petrol and diesel reaching around 20 to 21 million tonnes. Existing refineries have a refining capacity of 18 to 20 million tonnes per year. However, considering the projected growth and increasing energy demands, it is estimated that Pakistan’s annual consumption of petrol and diesel will reach 33 million tonnes by 2032. In light of this anticipated high fuel demand, the minister emphasized the need to construct a refinery with a capacity of 300,000 to 400,000 barrels, as well as the importance of crude oil storage for the country’s energy sector.
Latest posts by News Desk (see all)
- FBR asked to enhance efforts for Broadening Tax Net - May 27, 2023
- National Savings Rate for June-2023 - May 27, 2023
- Islamabad to get a new “Luxury Resort” - May 27, 2023